What are the different sources of business finance?

2 min read

1. Financial institutions:

One of the best ways to meet your business expenses is to apply for a business loan. All you have to do is meet simple eligibility criteria and submit the required documents. If your business is 3 years old and you have a credit score of 685, you can apply for a business loan from Bajaj Finserv and get up to Rs. 50 Lakh* (*Inclusive of Insurance Premium, VAS Charges, Documentation Charges, Flexi fees and Processing Fees) to meet your business' expenses.

2. Angel investors and venture capitalists:

Equity capital is another type of business financing. If you are a start-up or a new firm, you might not have adequate business vintage to qualify for a loan. In this event, you can reach out to angel investors and venture capitalists for financial aid. These investors offer funding in return for equity and profits.

3. Accounts receivable or invoice financing:

You may not be able to fund business expenses like purchasing raw materials or staff's salaries if your accounts receivables are unpaid. If this is the case, you can opt for invoice financing and use unpaid invoices as collateral to get funds. Leading financial institutions offer an invoice financing loan to help businesses address a liquidity crunch.

4. Inventory financing:

Inventory financing is a secured loan where a company pledges its inventory as collateral. This credit option is suitable for small businesses that don't have access to other financial solutions.

5. Business credit cards:

This is one of the most convenient sources of business finance for urgent needs. It is an unsecured credit facility that doesn't require any assets to be pledged.

There are various other sources of business finance too, like peer-to-peer lending, crowdfunding, and others.

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