IIndia, at present, has the ideal environment for start-up planning. As per the reports of NASSCOM (National Association of Software and Services Companies), more than 1200 start-ups emerged in the year 2018, among which 8 have already achieved unicorn status. This has taken the total count to 7200 successful start-ups across the country till date. The survey also revealed that investment into start-ups has increased sufficiently, from $2.03 Billion in 2017 to $4.2 Billion in 2018.

Start-up funding has also seen a massive rise (of about 250%) from $847 Million in 2017 to $3 Billion in 2018, as the NASSCOM report estimated. The reasons behind such an upsurge in business funding start from affordable business loan interest rates offered by several financial institutions and various government schemes to back start-ups, and so on.

 Few ways to raise fund for your start-up

Your funding strategy must be planned according to the nature and size of your business. After the capital requirements have been figured out, you have the following methods, other than a feature rich business loan, to accumulate funds for your upcoming start-up –

1. Self-funding

Also termed as bootstrapping, it signifies utilising your own savings, assets and available funds to support your business. Start-ups, as compared to an already established business company, does not have all funding options open to them. As such, self-funding is the ideal option to get started with your proposition.

Bootstrapping also acts as a boon in the later stages of the business.  Investors automatically have a positive notion about you, knowing that you have built the business with your own savings instead of opting for external financing.

1. Crowdfunding

Crowdfunding is similar to availing unsecured business loans from multiple people at one time. This is one of the newer concepts in funding, currently under the scrutiny of the Securities and Exchange Commission.

Although it offers exposure to multiple investors, crowdfunding is a competitive arena to avail funding. The investors will only buy shares in your business only if they are sure that your business has the potential to flourish. Not having a rock-solid plan for your start-up can be one of the reasons why lenders deny loans to business owners.

1. Angel investor

Angel investors are individuals who lend funds to organisations, often preferring start-ups as they have a higher chance of succeeding. They bear the risk of investing in a small business with the objective of earning higher returns.

Apart from providing capital to your business, angel investors might also mentor and advise you regarding crucial aspects of your start-up.

1. Unsecured business loans

Unsecured business loans are advances where the borrower need not pledge collateral as security to avail from a lender. Any amount up to Rs. 30 Lakh can be availed to fund your business expenses. The risk factor is minimum here, given that you do not have to mortgage any property/asset in return of the funds. With attractive business loan interest rates, this is one of the most popular modes of raising funds. In case you are looking to finance your daily business expenses, availing working capital loans could keep your business afloat.

What Businesses can Qualify for Small Business Loans:

Every business which has obtained registration certificate by the concerned authority and has the required credit eligibility can apply for a business loan. To avail business funding a set of eligibility requirements will be there that one needs to be qualified. You might be asked to fulfil one or two more condition when you actually apply. To fund urgent finance for your business, lenders in India have the freedom to design their eligibility conditions as per their policies. However the most common eligibility criteria which lenders seek is your business vintage. If your business has the vintage of 3 or more years, there will be 50% chances that you can avail the fund for your business.

According to one of the recent surveys, it has been observed that about 94% of start-ups overturn within a year of operating because of fund crisis. This very fact could go out as a call to the start-up business owners to start looking for ways of accumulating business funds. The above mentioned ways will surely assist them secure the necessary financing in time.