4 Popular Business Startup Funding Options in India

Rahul Gupta

Jan 25th, 2017

Starting a new business is a perfect way to give wings to your ideas but it also poses some challenges and risks.

Irrespective of the type or magnitude of business, you would always need financial support to watch your budding ideas grow. Even if you have a well-established business, you will need funding to expand your business or meet your growing asset requirements.  

There are various funding options available for the startups and you need to access your business requirements, business prospects and preferences to choose the best funding option. 

1. Bootstrapping:

Bootstrapping is the simplest way to raise funds provided you have enough liquid savings and property that you can dispose or mortgage to obtain loans. This is usually suitable for funding a small scale business. It is one of the best ways to raise funds as you do not have to compromise with your position as you remain the boss of your business.

You have the free hand to take decisions on your own. This is a perfect option if you are just starting your business.

2. Bank Loan:

Bank also provides loans to the individuals to fulfill their investments options but you need to have strong balance sheets to obtain a loan from the bank. Issuing of loans to a business is strictly based that considers your current revenues rather than unrealistic projections. Thus, it is a suitable option only if you have settled business with good revenue generation and are looking for funding option to expand your business. 

3. Crowd Funding:

Crowd Funding is another excellent funding option if you have an attractive idea and good performance to show. It allows several individuals to invest in your business. It is long-term funding option with a potential to raise huge fund as per the scale of your business. 

4. Venture Capital:

Venture Capital funding is suitable for large scale business requirements but you must have an established business with good performance. With Venture Capital, you must be prepared to lose some control on your business as someone from venture capital firm would have their say in decision making.

You would need to showcase a strong business model and strong workforce to attract Venture Capital Firms.