The opportunities for start-ups in India continue to grow, and with these opportunities come challenges such as financing. Having timely access to finance to take advantage of your business opportunities can be a game changer for your start-up. As a dynamic entrepreneur and business owner, you want to be in a position to secure funding when needed to start or grow your business. You need cash to get your new idea off the ground, fund an expansion, increase your business stocks, purchase new innovative equipment, fund new talents or meet other business expenses.
However, you may be facing difficulties in securing deals with investors and venture capitalists; or are reluctant to use these forms of finance because you do not want to give away some equity in your business. You may also not qualify for funding from the India Start-up Initiative, which is part of the government’s support for start-ups.
Credit options
You can fund your start-up through credit. This is where you borrow money from banks and other lenders; this can be good, as it allows you to obtain finance to achieve your business goals. They can be in the form of business loans, overdrafts and credit cards. However, where you are unable to get a business loan because your business is not established, and therefore have a limited business financial history to back the credit application, you may be able to search for personal loans that suit your purpose.
Equipment finance
Another source of finance to consider is the use of equipment finance. This is also a form of credit, however, it is in the form of an asset-loan made to your business. The lender lends the money for the purchase of the equipment, and has a number of benefits. The equipment serves as a collateral, which means you are likely to secure the funding. This is also a good option where the revenues from the equipment will far outweigh the interest payments.
Be smart with your finances
Using credit to finance your business means that you have to manage both your business and your personal finances efficiently and be in control. You should adopt effective financial management practices in your business and have a good plan in place to repay your loans. This not only ensures that you have a good credit for future financing needs, it also ensures that you are managing your business profitability and ultimate success.
Ultimately, the finance options you decide on and how you manage them will shape the future of your business; any debt financing decisions should therefore be made responsibly.