Small and medium enterprises (SMEs) are the economic wheels of a developing country like India. There are about 51 million such small businesses in India, contributing to one-third of the GDP.
These SMEs need access to creative sources of financing. They often do not have enough cash reserves to fund their business stipulations and manage working capital.
With a wide range of innovative options, alternative finance has been instrumental in the success of small businesses.
Business loans from NBFCs
Non-Banking Financial Corporations (NBFCs) provide affordable small businesses loans to SMEs with flexible payout options. Rigid lending norms followed by banks have caused NBFCs to step up and support these small enterprises.
A combination of automated technology and less paperwork means businesses can access working capital within 24 hours. This provides them with the necessary cash flow in crunch situations.
Some of the leading NBFCs offer a Flexi loan facility with their business loans, where you can withdraw funds from your limit when you need them.
Equity financing is a very useful fundraising method for new businesses and SMEs. Small businesses can raise capital by selling their shares in the form of common stock. These funds might come from personal resources or a third-party investor called an angel investor.
Small businesses can ask their manufacturers and distributors for help with short-term business financing. You can convince them to defer your payment for inventory until the rolling target is achieved. When you repay their debt in time, you can negotiate for long-term funds and better payment terms to expand your business.
Peer-to-peer lending or crowdfunding is a popular creative method of acquiring funds for small businesses. Businesspersons reach out to thousands of investors through various online lending portals. Capital acquired through it can be debt, equity or reward-based.
There are many creative and conventional options for funding small businesses. You can secure funding with a robust business plan and persistence and keep your venture running.
While care is taken to update the information, products, and services included in or available on our website and related platforms/websites, there may be inadvertent inaccuracies or typographical errors or delays in updating the information. The material contained in this site, and on associated web pages, is for reference and general information purpose and the details mentioned in the respective product/service document shall prevail in case of any inconsistency. Subscribers and users should seek professional advice before acting on the basis of the information contained herein. Please take an informed decision with respect to any product or service after going through the relevant product/service document and applicable terms and conditions. In case any inconsistencies observed, please click on reach us.
*Terms and conditions apply