5 Ways To Collect Funds For Your Business
When you start a business or decide to take the leap of expanding your current business, an important question always surfaces: What are the ways to grow business funds? If you need to know from where you can acquire business funds, here are a few methods you can try:
1. Equity Capital
This is a method of raising funds in which shares are sold to the public or financial institutions, granting them ownership of your company. An amount called dividend is paid to the investors every year based on how profitable your company is. It’s the costliest and safest method of financing a business, and reduces your debt to income ratio. It doesn’t just answer the question of how to grow a business, but also gives you enough means to raise the initial start-up capital.
2. Business Loan
A business loan is availed by a firm or individual to pay for business expansions or to fund their start-up expenses. Just like how interest rates are applicable for any loan, business loan interest rates are no exception either. If you’re looking for a Business Loan with low interest rates and other benefits, then you can take one from Bajaj Finserv, where you can avail a loan amount of up to Rs.30 lakh. The documents required for a business loan from individuals like sole proprietors, partners, and directors are nearly the same as those required from private limited companies and partnership firms. To avail a business loan, you need to be paying a minimum of 1.5 lakh as your business’s Income Tax Return, towards the annual turnover. If you apply online for business loan with Bajaj Finserv, you’ll receive an end-to-end service on an unsecured Business Loan.
3. Venture Capital
To know if you have business loan eligibility, you’ll have to sit through a long documentation process. This process is usually time consuming, and will not let you acquire funds as soon as you need them. This is where venture capitalist funding comes into picture. This type of funding is used when your start-up has a high potential value at its initial stage. Venture capitalists are investors who provide you with funds if they are satisfied with the description of your business, and sure of its success. The investors usually have a say in the management and own equity in your business.
4. Line of Credit
This is a facility that offers you a certain limit of credit or loan for a fixed duration. The advantage of this credit facility is that you only have to pay the interest as EMI and pay the principal amount at the end of the tenor. This way, you can end up saving 45% of EMI. You can now get a Line of Credit immediately with instant online approvals from Bajaj Finserv.
There are numerous other ways to raise money for your business, including debentures and angel financing. You need to determine your financial requirements and the application of funds in your business before you pick a source of funding.