#raisingstartupfunds

[seppotechnology-blog]

What are the Options for Raising Startup Funds

What are the options for raising startup funds? Money is the blood of every business. Many businesses fail during the first year of operation. Lack of funds is the common reason for the failure of the business. In order to generate revenue in business, you need capital. It will require at each stage of business.

The requirement of fund mainly depends upon the nature and type of the business. When you determine the need of fund then you will start finding sources for raising startup funds.

Let us discuss the available options for raising startup funds:- • Self-funding for a startup business: self-funding is the most effective way of raising startup funds which are also known as bootstrapping. For the first time, entrepreneurs have face difficulty in getting funds without some traction and a plan for the potential success of the business. You can raise fund from your own savings and borrow from your friends and family. It is easy to raise funds because it involves fewer formalities and less cost of raising funds. It is considered to be the best option due to its advantages.

• Raise funds through bank loans: when entrepreneurs thinking about raising startup funds then the bank is the place where they can go. Banks offer two types of financing for a startup business: working capital loan and funding. The working capital loan is the amount which is needed to run the cycle of business for generating revenue. Funding includes the process of sharing the plan, the valuation details and project report on which approval of the loan is based. Most banks in India provide many SME finance by various programs.

• Get business loans from micro-financers or NBFC: if you don't get approval for a bank loan then don't worry. It is an option for you. Microfinance mainly provides financial services to those who would not have to get banking services. It is the most popular for those who need are limited. NBFC offers banking services without any legal requirement of a bank.

• Government programs that offer startup capital: The Government of India has launched many programs for raising startup funds. Government has launched the Bank of ideas and innovations program in order to increase innovative product companies. Government starts Mudra plan with an initial collection of 20,000 crores to increase benefits to around 10 lakhs. You required to submit your business plan. For the sanction of loan, you need the approval of the business plan. You will get MUDRA card that you can use to buy raw materials or other expenses.

• Get angel investment in a startup: angel investors are those who are having huge cash and interested to invest in startups. They work in groups of the network to overall screen the proposals before investing. They also provide advice along with funds. The main advantage of raising startup fund from angel investors is that they are ready to take more risks in investment for higher returns.

So, all these are the options for raising startup funds. You can raise your funds from any option according to your convenience and suitability.