Do you have a solid business idea? Are you looking for the best ways to fund your entrepreneurial journey? Whether you’re just starting out or want to take your start-up to the next level, finding the right capital sources can be tricky.

From bootstrapping to getting a business loan, there are a lot of options that you can consider to fund your start-up. Don’t forget to evaluate factors like the current stage of your start-up, its revenue, how much equity you can offer, etc. while choosing the best method.

Here is a list of all the different sources of funding for start-ups in 2022.

1 Bootstrapping

Also known as ‘self-funding’, this is the most common and recommended method for initial start-up capital. By bootstrapping your business, you will have full control over its operations and profit. This will also confirm the stability of your business when you decide to raise external funds in the future. 

2 Family and friends

Your family and close friends have the maximum trust in you and your idea. Therefore, asking them to invest in your business can be a smart move as you retain 100% of the control. Although this is a less formal method of raising funds, you can draw an agreement to protect the interest of both parties.

3 Angel investment

Angel investment or seed funding is ideal for early-stage start-ups. Angel investors are individuals with surplus cash who are willing to take a high risk for high profits. Angel investors usually offer a small ticket size of funding in exchange for equity, which means you will not have a 100% control over your start-up.

4 Venture Capital funding

We recommend you opt for venture capital funding at a later stage when you generate good revenue. Venture capitalists will only invest in your start-up if they find your business model promising. They will also evaluate different aspects of your business and expect a high return on their investment.

5 Business loan

Another convenient way of raising funds for your start-up is getting a loan from a financial institution. Based on your requirement, you can either get a working capital loan or a term loan. But looking at the high risk associated with start-ups, most lenders follow strict guidelines to approve loan requests.

6 Government loan scheme

The Government of India has introduced several schemes to promote entrepreneurship and help start-ups and MSMEs with their credit requirements. You can avail these schemes for collateral-free and affordable business loan interest rates. The Government business loan schemes include: 

  • Start-up India
  • MUDRA loan scheme
  • Stand-up India
  • Credit Guarantee Fund Trust
  • Trade-related Entrepreneurship Assistance and Development (TREAD)
  • Make in India
  • Atal Innovation Mission, etc.

Grow your start-up with Tata Capital

Are you ready to take a plunge into the start-up ecosystem? Are you ready to become the next Indian unicorn? If yes, then Tata Capital is your trusted partner. With affordable interest rates and an easy loan approval process, getting funds for your business is easier than ever.

Visit our website to check your business loan eligibility today. You can also use our business loan EMI calculator to check your potential EMIs.

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