Every year many startups begin their operations with an aim to dominate the existing market. However, the actuality speaks otherwise. As per a recent study, over 94% of novice businesses fail during their first year. Wondering what could be the reason behind this? Well, lack of funding turns out to be the primary reason. Entrepreneurs take the gamble of embarking on the journey of a startup without giving a thought to how they will be generating the much-required capital. Without doing any sort of planning they begin to proceed. But to their disappointment, the lack of money that is the bloodline of any business pushes them to quit.
Thus, if you are someone who intends to open their startup business, it is endorsed that you do it meticulously. Decisions taken in haste can go against you. One of the things that should be on the top of your list is to find the answer to the question: how would you finance your startup? Once you have the way out, you can certainly thrive on your path. It is also imperative to highlight here that different sources of finance are available for business funding for startup companies. This post unveils some of them in detail:
. Bootstrapping
The act of “Bootstrapping” can pay you rich dividends Self-funding that is popularly known by the moniker bootstrapping, is an efficacious method of startup financing, especially when you have just begun on your business career. First-time entrepreneurs often have to endure the wrath of insufficient capital. Plus, they are unable to discover plans for potential success. To overcome such hassles, you might find the concept of investing your money quite intriguing. You may also involve your family members in this approach.
The wonderful side is that raising capital with this strategy is quite simple. You don’t need to get involved in any sort of paperwork. In simpler words: there are lesser formalities implied. Moreover, in most situations, even family and friends are flexible with the interest rates.
Self-funding should be considered as the first priority seeing its ability to furnish a plethora of advantages. When you have your own money, you try to work even harder. And when you finally flourish, many investors would approach to invest in your business.
The only downside to this approach is that it remains efficacious when the initial requirement is small. Some businesses need money right from the beginning. In such cases, the concept of bootstrapping might not evolve as a stupendous option.
- Angel Investors assistance
If you are unaware of angel investors, don’t worry as we have got you covered. Fundamentally, they are individuals possessing surplus cash and are keen to invest in upcoming startups. They also work in an ensemble and offer mentoring or advice alongside capital. The past shows that many startups have taken the benefits of angel investors.
- Raise money through bank loans
The other compelling way of generating funds is through bank loans. Such institutions are known to aid in two ways. One is a working capital loan, and cvbthe other is funding. Throwing light on them individually; a working capital loan is a loan required to run one complete cycle of revenue-generating operations. Further, this limit is usually decided by hypothecating stocks and debtors. On the contrary, funding from banks works on the same process of sharing the business plan along with the valuation details! Based on these deets, the loan gets sanctioned.
- Loans from NBFCs
If you are unable to persuade banks from giving them a loan, don’t perturb as there are an eclectic number of other options up for grabs. This method of giving loans has gained immense popularity in the last few years especially when loan requirements are less.
Non-Banking Financial Corporations abbreviated as NBFCs are corporations that furnish loans to entrepreneurs without embracing the same guidelines as set up by banks. You are likely to gain assistance when other methods don’t go in your favor.
Nainer can aid you in the best possible ways
If you are an individual with a great business idea; however, due to some reason you are unable to take it through, don’t worry as Nainer is there for your aid. Our team of professionals will not leave a stone unturned to ensure that your plan dominates the market and reaches the highest state of efflorescence. Plus, we will also make sure that you connect with the right investors so that money is never a constraint for you.
At Nainer, we diligently ditch employing outdated conventional systems. We have paved such a path that empowers investors to bypass the traditional system of gatekeepers.
