6 Ways To Fund Your Small Business

Financing your small business in the existing economic landscape, calls for some innovative thinking. Today, small business owners are forced to think of beyond the traditional ways of business financing. Traditionally SMEs have been the main drivers of a nation’s economic growth and wellbeing. However, business owners, often find themselves running pillar to post when it comes to financing their small businesses in India.

The money is out there, but timely access to it is no less than scaling the Everest. The recent digitization push, by the government, has eased matters to certain extent. But quick access to small business finance is still a challenge. Furthermore, since SMEs tend to heavily rely, on one or two traditional funding partners, it often gives way to unexpected financial crisis situation.

Are you able to relate to this? Well don’t worry, SMEcorner suggests you keep your options open. If not anything you will at least be able to compare business loan offers from various sources.

Keeping that in mind, SMEcorner suggests, the following 5 different ways of SME financing:

1. Bootstrapping: A common traditional type of business funding, where a small business owner self-funds his business from his/her personal savings. However, business financing from personal savings is not advisable for small businesses that have been around for 2 or more years. Borrowing from an external or debt financing is the best way to go forward.
2. Friends and family.

This way of business financing is ok if you are looking for sudden and one-time infusion of funds into the business. While tapping into your inner circle of friends and family is the easiest way of getting money, its perhaps better you keep your personal and business relations separate. For long term business funding, look at more professional and risk-free options. SMEcorner offers collateral free business loans in India, in just 3 business days.

3. Term loans

This type of loan is every small business owners favorite. Under a term loan facility, one can borrow a lump sum amount at one go and pay it back in set installments by a certain date. Usually, term loans have fixed interest rates and some offer variable interest. The average small business loan term offered by various lenders spans anywhere, between 6 months to 36 months. SMEcorner offers unsecured small business loans with a minimum 6-month tenor. All you need to do, is fill in a simple online application to know your eligibility instantly and receive the funds in as fast as 3 business days.

4. Loans from Banks

Attracting funds from banks is a tricky business. You need to be really patient with them. Banks have the most stringent criteria when it comes to giving a small business loan. To get a loan sanctioned from a bank, you need to have a good business plan, profitable projections and a positive P&L and balance sheet. Unfortunately, most SMEs do not fulfil all the criteria. Thus, the high rate of SME loan rejections by banks. These days there are many companies that specialize in helping small businesses get quick and easy access to funds. They can help you with collateral free business financing in a matter of days.

5. Lines of credit

If your small business is seeking a temporary, or small infusion of working capital a line of credit is worth a try. Most banks offer it, but again, banks come with their long checklist and extended wait time. Now given that most banks are dismissive of SME financing needs, unless one can produce some good collaterals and a positive balance sheet, it is always advisable that one looks beyond banks.

6. Venture capital

Most suited for SMEs that have become profitable and are looking for nothing less than 1Cr plus in funding. Venture capitalists, directly take a major stake in equity and control of your business, so think before you this route. Besides this, you need a lead time of at least 6 months to research, prepare and raise funds.

Regardless of which business financing option you choose, chances are that you may have to take one or these financing instruments, at some point of your business life cycle. At the end of the day, every business owner wants to do what he/she knows best; pay full attention to your business growth. This will be only be possible if you are able to arrange a reliable and viable funding solution for your business. This way you are not only able to maintain your day-to-day operations but also focus on profitability and growth.

SMEcorner is an online SME lending company that offers unsecured business finance for small businesses. Their advanced lending platform eliminates the entire leg work (running from bank to bank), out of your way and you can get a loan in as fast as 3 working days. Visit https://www.smecorner.com/ or call 9987535888 to know your small business financing options.

SMEcorner is a digital lending platform, that helps SMEs in India meet their working capital needs with collateral-free business loans in just 72 hours.