Don’t Let Your Business Die Due to Lack of Funding
Seeing their business grow and reach stellar height is a dream of every business owner. However, it takes a lot of hard work, a strong will, patience and of course a regular inflow of finance to keep your operations going and growing.
The lack of finance can break any business. Let’s understand the importance of finance in a business with some facts. As per a report by Nasscom and Zinnov Consulting, India occupies the third place among the countries producing the largest number of start-ups. However, according to a recent survey by the IBM Institute for Business Value and Oxford Economics, in the year 2016, over 200 start-ups had to shut down operations in India. The main reason for the failure of these businesses is lack of innovation and funds. Despite of our amazing entrepreneurial strength, more than 90% of its new businesses fail before the first 5 years of their inception due to these two reasons.
An entrepreneur needs funds to cater to various business related needs including – stocking up your inventory to meet the growing demand of your products and services, buying new machines or gadgets for improved productivity, buying a new space or expanding the old one for growth purpose, to meet financial crunches, and so on.
If you own a small and mid-sized business, getting timely funds can be a complicated task may times. What are the options available for you during those tough times? Here are three most recommended financing alternatives that can help your business sail through tough times:
Business Loans: You can avail a Business Loan for all the business related expenses such as buying new inventory, bearing the new project cost, buying a new space, modifying your existing business infrastructure, maintaining cashflow, and so on. Business loan can be availed by any proprietor, self employed individual, private ltd. company or partnership firm involved in trading, manufacturing, or service related business.
The basic eligibility criteria to be met by a Business Loan borrower includes:
- Business financials for last 2-3 years
- Years of business continuity and current business activity level
- The nature of the business and the industry it operates in and the analysis of industry on how it has performed in recent times
- Borrower’s current obligations, credit limits, and instalments of other finances the business entity may have
- The borrower’s credit history and credit score
Loan Against Property: If you have any property in your name or in the name of the co-borrower (if any), you can avail a Loan Against Property (LAP). LAP is much more affordable than unsecured business loans and can help you fund your business needs.
Here are some common factors that decide your eligibility for a LAP:
- Your property’s current market value and its current status
- Your current Income
- The nature of yours employment and continuity in the same
- Your current obligations, credit limits, and instalments of other finances the business entity may have
- Your credit history and credit score
- The purpose of availing the loan
Business Credit Cards: These Credit Cards can be used for incurring short term business expenses, like getting a needed cash inflow, maintaining daily business expenses, paying bills on time, and others.
Using a Business Credit Card can help you establish a credit history and improve the credit score of your business. It is advised to choose a Business Credit Card with those providers that have a huge range of products relevant to your business, to build a strong financial relationship and get more purchasing power.
These cards have higher credit limits than your personal Credit Cards, and not only help you manage business expenses, but also get you attractive rewards and offers.
Keeping a separate Credit Card for your business is very useful for maintaining a financial balance, and for tax purpose. Only those expenses that are related to your business can be deducted for a business tax return, so it is intelligent to keep your business expenses separate from your personal ones.
So, what are you waiting for? Don’t let your business die due to lack of funding and avail any of these financing solutions to overcome any funding related hurdle in the future.
To avail lowest interest rates Business Loans, talk to the Business Financing Specialists of mymoneymantra right now. With extensive information about ongoing conditions of financial market, and years of experience, they can help you get cheapest and best Business Loans, Loan Against Property, or Business Credit Cards. Call us toll-free at 18001034004 for best offers.