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    Sources of Funding For Small Business: 1) Bootstrapping Your Startup Business

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    Chietransh Jain
    1. Bootstrapping by raising funds from personal savings, family, and friends is an easy option that maintains control over the business without formalities or losing equity to investors. 2. Taking pre-orders or advance payments from customers before a product or service launches can improve cash flow and make customers early investors. 3. Other options include obtaining bank loans or loans from non-bank financial companies by sharing business plans and financial projections, crowd-funding platforms, and government programs that provide startup capital such as grants and loans from organizations like SIDBI.

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    Sources of Funding For Small Business: 1) Bootstrapping Your Startup Business

    Uploaded by

    Chietransh Jain
    491 views3 pages
    1. Bootstrapping by raising funds from personal savings, family, and friends is an easy option that maintains control over the business without formalities or losing equity to investors. 2. Taking pre-orders or advance payments from customers before a product or service launches can improve cash flow and make customers early investors. 3. Other options include obtaining bank loans or loans from non-bank financial companies by sharing business plans and financial projections, crowd-funding platforms, and government programs that provide startup capital such as grants and loans from organizations like SIDBI.

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    SOURCES OF FUNDING

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    1. Bootstrapping by raising funds from personal savings, family, and friends is an easy option that maintains control over the business without formalities or losing equity to investors. 2. Taking pre-orders or advance payments from customers before a product or service launches can improve cash flow and make customers early investors. 3. Other options include obtaining bank loans or loans from non-bank financial companies by sharing business plans and financial projections, crowd-funding platforms, and government programs that provide startup capital such as grants and loans from organizations like SIDBI.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    491 views3 pages

    Sources of Funding For Small Business: 1) Bootstrapping Your Startup Business

    Uploaded by

    Chietransh Jain
    1. Bootstrapping by raising funds from personal savings, family, and friends is an easy option that maintains control over the business without formalities or losing equity to investors. 2. Taking pre-orders or advance payments from customers before a product or service launches can improve cash flow and make customers early investors. 3. Other options include obtaining bank loans or loans from non-bank financial companies by sharing business plans and financial projections, crowd-funding platforms, and government programs that provide startup capital such as grants and loans from organizations like SIDBI.

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    SOURCES OF FUNDING FOR

    SMALL BUSINESS

    1) Bootstrapping Your Startup Business:


    You can invest from your own savings or can get your family
    and friends to contribute. These funds would be easy to raise due
    to less formalities/compliances and without losing your control
    over business to investors. In most situations, family and friends
    are flexible with the interest rate.

    2) Product or Service Pre-Sale: Taking advance fees


    and money from your customers before your product or services
    gets launched is an often-overlooked and highly effective way to
    raise the money needed for financing your business. Remember
    how Apple & Samsung start pre-orders of their products well
    ahead of the official launch? Make your customer your investor
    and improve your cashflow in the business.

    3) Raise Money Through Bank Loans or NBFCs:


    Funding from bank would involve the usual process of sharing the
    business plan and the valuation details, along with the project
    report, based on which the loan is sanctioned.
    4) Crowd-Funding:
    Crowd-funding is the practice of funding a project or venture by
    raising small amounts of money from a large number of people,
    typically via the Internet platforms such as patreon and
    kickstarters.

    5) Govt Programs That Offer Startup Capital:


    Different states have come up different programs like Kerala State
    Self Entrepreneur Development Mission (KSSEDM), Maharashtra
    Centre for Entrepreneurship Development, Rajasthan Startup
    Fest, etc to encourage small businesses.
    SIDBI – Small Industries Development Bank of India also offer
    business loans to MSME sector.
    If you comply with the eligibility criteria, Government grants as a
    funding option could be one of the best. You just need to make
    yourself aware of the various Government initiatives.
    6) Get Funding From Business Incubators &
    Accelerators:
    For early stage startups, accelerators and incubators offer great
    ways to grow their businesses.

    Business incubators provide new businesses with office space


    and shared facilities, such as telecommunications systems and
    Internet connections, in a dedicated building. Entrepreneurs can
    also access advice and guidance from professionals such as
    accountants, marketing consultants and business advisers who
    are associated with the incubation center and act as mentors.
    Entrepreneurs typically stay in an incubation center for three to
    five years, although there is no maximum period.

    Business accelerators share some of the characteristics of


    incubators, offering professional advice and guidance to
    startups. However, the incubation period is very short and
    intense. Accelerators aim to turn business ideas into prototypes
    or products that are ready for market in a matter of months.
    Sponsors provide initial funding and expertise to small groups
    that can demonstrate a great product idea. In return, the
    sponsors take a small equity stake in the new business, which
    might be around 6 percent of total profits made by the company.
    The emphasis in business accelerators is on rapid growth and a
    successful product launch.

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