Tata Capital > Blog > Loan for Business > 10 Ways To Fund Your Startup in 2024
16 October 2024
6 mins read
2721
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.
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.
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.
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.
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.
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.
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:
Crowdfunding helps you raise funds by collecting small investments from a large number of people, typically through online platforms. By presenting your startup idea on platforms like Ketto, you can attract backers who believe in your vision. This method helps you secure the necessary capital and validates your business concept through public interest and support.
To successfully launch a crowdfunding campaign, start by crafting a compelling story that clearly communicates your mission and the problem your startup solves. Use engaging visuals and offer attractive rewards or incentives to entice potential backers.
Freelancing can be an excellent way for you to generate funds while building your startup. You can leverage your skills to take on freelance projects for a steady income stream. Platforms such as Upwork, Freelancer, and Fiverr make it easy to connect with clients both locally and internationally.
Freelancing also offers valuable experience and networking opportunities. Working on diverse projects helps you develop a versatile skill set and gain insights into different industries, which can be beneficial for your startup.
Grants and competitions are fantastic opportunities for you to secure non-repayable funds and gain recognition for your startup. Various government bodies, private organisations, and industry-specific groups in India offer grants to support innovative ideas and entrepreneurial ventures. Participating in startup competitions can win you financial rewards and also help you gain valuable exposure and mentorship.
Research available opportunities and select avenues that match your startup’s industry and goals. Work on creating a strong application that highlights your business model, USPs and potential impact.
Small business grants are an excellent funding source for you, as they provide capital without the need for repayment. In India, various government schemes and private organisations offer grants to support startups and small businesses. These grants are often targeted towards specific sectors, such as technology, manufacturing, or social enterprises, and can help you cover initial expenses, research and development, or expansion costs.
To apply for such grants you need a persuasive proposal that clearly defines how such a grant will help you achieve your business goals and the impact it will have on it.
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.
You are eligible for the Startup India scheme if you are an Indian citizen, operating a business registered in India, and meet the criteria of being a startup as defined by SEBI. Your business should be less than seven years old and have an annual turnover not exceeding ₹100 crore.
There is no specific age limit for a startup under the Startup India scheme. The primary criteria focus on the business’s age, which should be less than seven years from the date of incorporation.
Equity funding is often best for startups as it provides significant capital without the obligation of repayment. Additionally, government grants and venture capital can offer both financial support and valuable mentorship to help your startup grow.
The best type of startup aligns with your passion and market demand. Technology-driven startups, especially in areas like fintech, edtech, and healthtech, are highly promising in India due to the growing digital landscape and consumer needs.
Previous Post
