Capital in business refers to the sum of financial assets required to produce the goods or services it offers to its customers.
The funds can be used to initiate business operations, meet the daily operational expenses or even to grow and expand into a larger setup.
Business capital is broadly of three types:
1. Seed Capital
Seed capital, also known as seed funding, is the initial investment required to establish a business. Expenses include the purchase or lease of work premises, buying necessary equipment and setup factory/ work space infrastructure.
2. Working Capital
Working capital is the funds required to meet the day-to-day expenses of a business such as premise’s rent, utility bills, employee salaries, raw material procurement, administrative expenses, etc.
3. Growth Capital
Funds required and used by a business to expand its operations is the growth capital. Also commonly known as the expansion capital, these funds are used for both expansion as well as sustenance of business operations during the process.
Businesses can also acquire capital either via equity or debt. Equity capital is the fund a business receives by selling its stock. Debt capital is the fund a firm avails as credit from a financial institution.
You can avail debt financing in the form of Business Loans from Bajaj Finserv and get up to Rs. 45 lakh.
Also Read: Funding options to raise capital for your business
MSME stands for Micro, Small and Medium Enterprise. It was introduced by the Government of India in agreement with the Micro, Small and Medium Enterprises Development (MSMED) Act of 2006. As per this act, MSMEs are the enterprises involved in the production, processing or preservation of goods and commodities. Vital for economic growth, this sector contributes around one-third of the country’s GDP and generates employment for around 110 million of the population.
It also plays an important role in the socio-economic development of the country as many of these enterprises operate in rural India. According to the Government's annual report of 2018-2019, more than 6 lakh MSMEs operate in the country.
Initially, MSMEs were classified based on two factors - investment in plant/machinery and an annual turnover of the enterprises. However, the Ministry of Micro, Small and Medium Enterprises has recently revised the classification by combining these two factors into a single criterion.
The MUDRA loan is provided under the Pradhan Mantri MUDRA Yojana (PMMY) to non-farming and non-corporate micro and small enterprises. These enterprises can avail loans up to Rs.10 lakh under the MUDRA (Micro Units Development & Refinance Agency Ltd.) scheme.
We have discontinued this product (MUDRA Loan) at this time. Please reach out to us on +91-8698010101 to know more about the current financial services provided by us.
|Loan amount under Shishu||Up to Rs.50,000|
|Loan amount under Tarun||Rs.50,001 to Rs.500,000|
|Loan amount under Kishore||Rs.500,001 to Rs.10,00,000|
|Processing fees||0.5% for Tarun Loan, nil for others|
|Eligibility criteria||New and Existing Units|
|Repayment period||3-5 Years|
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