Published: Updated On – 01:44 PM, Thu – 5 May 22
If you are thinking of starting a business or startup in India then now is the time because India is in its phase of the startup ecosystem and the whole environment is pro-business nowadays that is favoring aspiring minds and their brilliant ideas. Starting a business is much more than having an idea because there are many more other things that are required to start a business and one of such things is the funding or capital required to start the business.
Starting any kind of business, whether it is a startup, SME, or a large company, requires capital investment or funding. Funding is fundamental for starting a business or startup in this modern business ecosystem. In India, it can be a challenging and tiring task to get funding for your startup idea but we have tried to make it simple by compiling some ways by which you get funding for your startup idea:
The first option that you have to get funding for your startup idea in India is crowdfunding. It is the concept of attracting and collecting funds from multiple investors via different platforms who are interested in the startup idea, goals, objectives, and plans for making profits. In crowdfunding, multiple investors are involved, and based on how much they like and admire your idea; they offer a fixed amount of money to fund the startup project.
In India, we are seeing crowdfunding gaining popularity because this not only helps to raise funds for startups only but also for social causes, charities, relief funds, etc. In India, the major crowdfunding platforms that are popular all over the country include Kickstarter, Milaap, Wishberry, FuelADream, and Fundable.
If we talk about the best way to fund a startup project then undoubtedly it would be self-financing. Many individuals and entrepreneurs who have the resources prefer to self-finance their startup ideas instead of relying on other sources because even when you ask for a loan or contact a government entity to fund your startup idea, they will be curious about the amount of capital that you will be investing in the startup and they will ask for traction before making an investment.
If you have got enough savings then investing them to fund your own startup idea is the best option available, especially for first-time entrepreneurs and during the early stages of business when it is difficult to convince others to believe in you.
In the later stages of business, you can easily opt for other ways to get funding such as business loans. These loans usually get approved easily since they consider nothing but the stability of the business and this will give you the resources to invest elsewhere such as in Lottery Sambad or Dhankesari.
Loans From Public And Private Sector Banks
Public and Private sector banks are commonly considered by entrepreneurs to get funding for their startup projects because banks are considered to be a reliable and convenient way of getting loans and funding as compared to other methods. In India, both public and private sector banks offer loans to startups in two forms; Term Loans & Working Capital Loans.
Almost all the banks including the private and public sector banks offer business loans to fund startup ideas but there are variations among things like the interest rate, the loan amount, the repayment tenure, etc.
Loan Schemes From The Government Of India
Recently, the government of India has announced various loan schemes to support startups, SMEs, MSMEs, and other entrepreneurs who want to bring their ideas into reality. Different loan schemes that were started by the government of India include MUDRA loans, Stand-up India scheme, Credit Guarantee Fund Scheme for Micro and Small Enterprises (CGFMSE), National Small Industries Corporation Subsidy, Credit Link Capital Subsidy Scheme for Technology Upgradation, and various others.
Another way of getting funding for your startup idea is through angel investors who are individuals with surplus cash and are looking to invest in new startup ideas that they think have the potential. Angel investors invest in promising startups and once the startups reach their potential, they get a share out of it.
The risks involved with Angel investments are more compared to getting loans by financial instructions because Angel investors invest only for higher profit returns & the investments are less as compared to financial institutions but it is worth mentioning that companies like Google, Alibaba, and Yahoo were are all a result of angel investment. In India, popular angel investors include companies like Mumbai Angels, Hyderabad Angels, and Indian Angel Network.
These were some of the popular ways by which you obtain funding for your startup idea in India. Remember to choose the option that is best for your startup in the long run.