There is a lot you should know and figure out before starting a business. You must figure out the funding before starting any MSME business. Here, we have brought some incredible ways to help you get MSME funding for your business.
Funding is everything for every startup. It makes your business start upon a strong base and helps to expand and grow further. Here are a few things you need to know about MSME funding and how you can raise that funding.
Self-financing startup: This is the hard way to raise funds for your startup business. Self-financing or personal investments are the best way to begin a startup. When you take loans from any money lending institutions or banks, they will always ask you how much capital you are investing in the startup. So, investing in your own business is a great way to start for entrepreneurs. In the next stages of a business, you can opt for business loans, and the lenders should not have a reason to deny it.
Getting an angel investor: Many individuals with surplus cash can be your angel investor for your business. However, in such cases, the angel investors are taking more risks than the entrepreneur. These investors are planning to invest for higher returns to the profit. Some angel investors in the country are Mumbai Angels, Indian Angel Network, Hyderabad Angels, and more. Any startup can get directly in touch with these investors for funding support.
Crowdfunding support: Crowdfunding is a concept coined for collecting funds from various investors from social networking sites and other web-based platforms for major business purposes. Web portals can raise funds for different purposes like social causes, ideas, charities, disaster relief, and other events. This concept or idea has been adapted by the entrepreneurs as well. Many crowdfunding sites in India include Kickstarter, Catapooolt, FuelADream, Fundable, Indiegogo, and more.
Loans under government schemes: The Government of India has launched many schemes that aim to help startup enterprises. The government is trying to boost the socio-economic growth of rural India. Educated youth, Women entrepreneurs, individuals from SC/ST categories can easily make use of these SME and MSME loans. These schemes initiated by the government of India to help the startups include the MUDRA loan scheme under PMMY, Start-up India, Stand-up India, Atal Innovation Mission, and more.
Loans from banks: Banks are considered as the priority for startup businesses. The entrepreneurs find it a reliable and convenient way to get money. The banks provide funding to startup enterprises in two different forms named term loans and working capital loans. However, the loan tenors, the repayment, and the interest rates are going to vary from bank to bank.
Small business loans from NBFCs, MFIs: When you start to borrow and do not have a financial history or maintain any credit score, it will become difficult to get loans from private sectors or banks. These are the times when you can opt for the NBFCs and the MFIs for some small business loans. However, you should know that the MSME loan rate of interest offered by these companies is higher than the banks.
These are some of the best ways you can try to raise funds for your startup business. The MSME funding is easier if you know where to go for it. Try these tips today and kickstart your business today.