Creative Ways of Raising Funds for Small Businesses
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Creative Ways of Raising Funds for Small Businesses

  • Highlights

  • Need for creative sources of financing for SMEs is well recognized

  • Small businesses can approach NBFCs for business loans

  • Business loans by NBFCs are disbursed quickly

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.
However, the need for these SMEs to access creative sources of financing is well-recognized. It often happens that they do not have enough cash reserves to fund their business stipulations and manage working capital.
With a wide range of different and innovative financing options, alternative finance has been instrumental in pivoting success of small businesses.

Business loans from NBFCs

Non-Banking Financial Corporations (NBFCs) provide small business Loans to SMEs at affordable interest rates and flexible payout options. With rigid lending norms followed by the banks, NBFCs have stepped up to support these small enterprises.
A combination of automated technology and less paperwork means businesses can get access to working capital within 48 hours. This provides them with necessary cash-flow in crunch situations.

Business loans offered by a some of the leading NBFCs offer Flexi loan facility, where you can withdraw funds as and when required from your approved limit.

Equity financing

Equity financing is a very useful method of fundraising for new businesses and SMEs. Small businesses can raise capital by selling shares of the business in form of a common stock. These funds might infuse from one’s personal resources or any third-party investor called angel investor.

Trade creditors

Small business can ask their manufacturers and distributors for their help by providing short-term business financing. They can be convinced to defer your payment for buying inventory until the rolling target is achieved. When you repay their debt in time, you can negotiate with longer funds and payment terms to expand your business.

How To Get Small Business Finance From Bajaj Finserv

Crowdfunding

Peer-to-peer lending or crowdfunding through various lending platforms is one of the popular creative methods of acquiring funds for small businesses. Businesspersons reach out to thousands of investors through various channels like online lending portals. Capital acquired through it can be debt, equity or reward-based. There are many creative and conventional options for funding of small businesses. With a robust business plan and persistence, funding can be secured to keep the venture running.

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