Businesses can require finance for a range of purposes at any given time. It is important for you to know the various options of financing available for you and make a prudent choice.
Do you need finance to pay for the everyday expenses of your business? Are you looking to finance equipment purchase? Is your current monetary requirement for scaling up your company? No matter what your business objective is, having a convenient and quick source of finance at hand is one of the most prudent things a business owner can arrange. Here are some options to get you thinking about the various sources that can help your business raise money when required.
8 Ways to Raise Finance For Your Business
- Taking a Business Loan: This is a loan that is customized for small and medium enterprises, offering a low interest and a flexible repayment tenor. There are specific business loans for working capital needs and machinery or equipment purchase too. Choose an unsecured business loan so you don’t have to pledge your assets, find out about all fees and charges associated with such loans and examine lenders to find a trustworthy source of business finance that offers you both flexibility and convenience. Check your eligibility as well as the documents required so that you can apply for a business loan when the need arises.
- Liquidating Current Assets: Think about any excessive cash stuck up in your current assets, which may include stocks and debtors. To raise finances and improve the cash flow in your business, you can liquidate these assets. Left over stocks can be sold and credits given can be recovered to create a source of funds for your business.
- Debt Factoring: This is a process of selling your business invoices to another party in exchange of upfront finance. The third party then can get reimbursed from the recovery of the debts sold to it by your business. This is a convenient form of finance and can help you get funds in times of need.
- Utilising Your Savings: If you have savings in the form of fixed deposits or even untouched cash in the bank, you can use it for business needs. Be careful when opting for this and limit how much of your savings you want to pool into your business, as it is also ideal to keep some of your savings intact for use in times of emergencies.
- Raising Finance From Relatives and Family: You can always approach your close family and friends for urgent financial needs of your business. Borrowing from personal sources needs to be done carefully and correctly with a repayment plan in place. If your business has good prospects and your family and friends are aware of its earning potential, they may be willing to lend you needed funds.
- Leasing: If your business has unused equipment, you can always sign up leasing contracts with other businesses at the cost of a fee. Lease is paid generally on a monthly basis. It ensures the most effective use of your equipment and also helps raise finance for daily needs.
- Line of Credit: This is a facility that may be available to you over business loans. It gives you access to a credit line, from which you can borrow as much money as you need for working capital or other requirements. Here you only pay interest on the amount used and have the freedom to withdraw more up to the credit limit. You can also prepay the amount used, and re-avail the prepaid amount when needed. This helps you manage your business cash flows as the EMIs you pay consist only of the interest amount. You can repay the principal at the end of the tenor.
- Credit Card: As long as you are certain about your financial ability and creditworthiness, you can always opt for finance using a credit card. However, if not used responsibly, a credit card can hinder your credit worthiness and affect your credit score in the long run, so use it carefully and when you know you can repay the amount spent within the time limit so as to not be charged high-interest fees.
Finance your business cash needs quickly and effectively with Business Loans from Bajaj Finserv, which gives you finance up to Rs.30 lakh and offers a convenient line of credit facility. With low interest and a flexible tenor from 12 months to 60 months, this may be the right way to finance your business requirements.