A recent study claims that close to 94% of the businesses fail in the first year due to lack of funding. When you have a great business idea and no capital to help the idea take off, you may find yourself in a difficult situation. Capital is the fuel required to run your business efficiently and raising money for your start-up is an onerous task. Here are 5 ways in which you can fund your start-up and chase your dreams

1. Bootstrap your business

Bootstrapping or self-funding is one of the ways in which you can start your own company. It is a brave yet smart choice for most people who have sufficient savings. First-time entrepreneurs especially often struggle to get funding without showing any plan for success or traction. In these cases, self-funding is the safest option for them as the risk of debt is non-existent and they can always secure more funds from investors or venture capitalists at a later stage when the business shows some promise.

2. Friends and family

As compared to an investor or a bank, it is easier to convince your friends and family to help you fund your start-up. But you need to be extra careful when you mix business with personal relationships. While your friends and family are the ones to believe in you and support you, you owe it to them to repay the money back once your business takes off. It is a safer, low-risk option to secure funds for your start-up from your folks.

3. Small business loans

A lot of banks these days offer small-business loans to help start-ups grow. These loans are given on tenure of up to 5 years at a certain interest rate and are to be paid back in monthly EMIs. Make sure your business is eligible to qualify for a loan before you apply for one.

4. Angel funding

Angel investors have surplus money and are keen on investing in growing businesses and start-ups. They also offer their support in terms of mentorship and can help start-ups grow in the right direction.

5. Crowdfunding

If you have a great business idea, you can seek crowdfunding. One of the newer ways of getting funds for your start-up where you have to share your business idea, details on a crowdfunding platform and mention your goals in terms of the funds you seek. Anyone who likes your idea or believes in it can contribute to your cause and this way you can raise funds for your company.

Click here to know more and apply for a business loan

DISCLAIMER

The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.



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