Wanting to reach the heights of success is a dream for any company thriving in today’s competitive market. To make those dreams come true, organizations need proper funding. In fact, for entrepreneurs, the time is ripe to launch their start-ups. However, a correct course of action for the future and an intuitive approach will help a business grow by leaps and bounds.
If you are an entrepreneur working towards making the company’s vision a grand success, then getting proper funding is of utmost importance. The fundamental business scenario; today calls for receivable financing.
We will now look at the top options to receive funding in India.
- Crowdfunding: This is a viable option that is independent of invoice finance. You can compare this option with mutual funds. Many investors will be involved in providing you with the fund you need. However, you will not see a steady influx of cash. Instead, the investors will provide you with a lump sum amount once you pitch your business idea and, obviously, if they like it. Crowdfunding in India is gaining momentum. You just need people who believe in your goals, the future course of action, your ability to make a profit, and so on. Investors to help you raise the fund could be your friends, family members, budding entrepreneurs who have conviction in your concept.
- Venture capitalists: Want to make it big? Visit the big fishes in the market. You can receive professionally managed funds from them if your business concept is promising. Well, yes, this receivable financing is dependent on invoice finance, but the expertise will receive for the growth of the business will be exemplary. Start-ups that have good traction will lure venture capitalists. If you are looking to procure funds from them, you have to have a flexible mindset to include them and take their inputs. Be ready to get under close surveillance of the VCs.
- Angel investment: These are individuals who have an abundance of money. They want to invest in start-ups that have a bright future. They will extract interest from your profits, and that is how they earn. Yes, they notice the movements in your business closely. They also expect high interest rates, as high as 30%. Angel investment is fine if you want to share a large part of your profit with them.
- Self-funding: If you can fend for yourself, it is the best option to choose. If you find it tough to convince people how worthy your business is, go for bootstrapping. Gain traction for your business with your own money initially. The move might even convince VCs to invest in your enterprise, which means the world to you. This is a way of building confidence in what you are doing. Bootstrapping is excellent if you can afford it initially. Plus, the independence that comes with bootstrapping, yup, it feels liberating. You are not answerable to anybody, your business, your way, your concept, you are the boss! No need for invoice finance or no need to depend on receivable financing.
Loans from financial institutions: To make your business scalable, you can consider taking a loan from leading financial institutions or NBFCs. You will get added financial support, but it might turn into a liability if your business somehow fails to meet the expectations. The interest rates can be pretty high to sustain. To top it all, it comes with a processing fee which might seem nominal. But, if you require considerable amounts, then it might pose a problem.