How to Get Startup Business Financing: Fast and Easy Business Loans

Business Start up funding

  • As mentioned above every one thinks about new business, but the funs is the most difficult thing to get.
  • It is obvious that no one will invest in you if you are new in the market. To get funds from different financial institutions, you have to prepare a project report on your business.
    In this report you have to show golden fruits to the financer. And how will your business work?
  • And for this you have to carry out the S.W.O.T analysis which describes the strength and weaknesses of the business and probable opportunities and threats.
  • And the statistical data report of expected investment, production, sales, consumer groups, profits etc. is a must in such reports.
  • Business firms undertake SWOT analysis to understand the external and internal environment. Through such an analysis, the Strengths and Weaknesses existing within an organization can be matched with the Opportunities and Threats operating in the environment so that an effective strategy can be formulated.
  • An effective organizational strategy, therefore, is one that capitalizes on the opportunities through the use of strengthens and neutralizes the threats by minimizing the impact of weaknesses.

Things to show in ideal project report, and it should be easy and self explanatory.

  • General Company Description
  • Products and Services
  • Marketing Plan
  • Operational Plan
  • Management and Organization..
  • Personal Financial Statement
  • Startup Expenses and Capitalization
  • Financial Plan
  • Refining the Plan
  • Summary

How to Get Small Business Startup Funding Easily and Qucikly?

Invest your money

  • If your business is not too big, the best option is having your own money to put into your startup.
  • You have the satisfaction of having saved it on your own, and the knowledge that you are not the debtor of anyone.

Establish a partnership firm

  • A partnership can be of any type
    • Profit sharing
    • Equal capital investment
    • Your work, partner’s money
    • Ratio proportion
    • More than two partners for having abundant funds, etc.
  • A good partnership is also synergetic, bringing more success than running a business alone

Take a normal and short term internal loan

  • This includes the money of relatives and friends as a loan to start the business.
  • These loans are called normal and internal loans.
  • Basically these loans are to be paid in short span of time. Normally the interest rates on these loans are not generalized.

Selling of the investments

  • To start your own business, you can sell your other investments like shares, debentures, bonds, F.Ds, insurance savings etc.
  • To fund your own business will be more advisable and motivating.

Grants and trust’s money

  • Community trusts are normally very helpful to new aspirants who want to start their own business. These trusts give loans on very reasonable rate of interest and with good pay back terms.
  • And government is also doing a lot to finance such new aspirants on the basis of reservation rules decided in law and category lists.

Leasing

  • Leasing is also a way to raise funds and save them, since equipment leasing reduces the initial startup costs over buying outright and makes some scope for further procedures.

Scholarships:-

  • Many management institutions declare scholarships to bright students to come up with new plans and business organizations.
  • Some examining committees and competitions also lend money to the aspirants who pass on some predefined criteria.

Barter system

  • This is a modern option to get funding in terms of barter deals. In this volatile business environment, every organization is dependent on some or the others for their different needs. And you have to find such firms which accepts your needs and in return you have to do something for that organization.
  • College fests and advertising industries are growing on this basis and doing so well.

Advance funding from banks

  • Some banks especially co-operative banks help a lot to small scale business. These banks provide advance funds for particular consignment and orders.
  • And after the contract or order gets over, you have to pay money back with some reasonable interest.

Advance payments

  • If your image and prestige is sound, the other party might not mind to pay in advance. For mid-level business, this kind of payments may be very useful and appropriate for both the organizations.

Shares and debentures

  • If your money need is huge and big-level company is going to be emerged by you, the best option to go with is issue of I.P.O. Public finance is the most preferred by adventurous businessman.
  • Equity shares, preference shares, debentures bonds, etc. are the ways to get public finance.

Bank loans

  • The most suitable finance for the emerging companies and beginners is BANK LOANS AND LOANS FROM CAPITALISTS.
  • For acquiring loan, the project report mentioned above is very important and. On the basis of these projects, loans are sanctioned.

How to Get Business Loan

If you have dreams to start your business but just do not have the money, you can go for business loans in India. If you can sell your business plan to the banks and even meet the required criteria, then you are eligible to get loans. Apart from funding, banks also give a guarantee or issue letters of credit, on behalf of the customer, to government departments or suppliers for the procurement of goods and services on credit.

If your loan amount is too big and are turned down by a bank you need not feel disappointed. The amount of business loan sanctioned varies from bank to bank. Up to a certain limit you generally, do not have to provide any security. Beyond certain limits, you are required to provide a collateral security or a percentage of business loans as margin. This may be accepted in terms of fixed deposit with the bank. Your business loan is similar to an overdraft. It is available like a limit on current account. In this case interest is charged only on the actual amount utilized, instead of the whole amount of loan.

Types of Business Loans:

Trade Loans
If you plan to start a business or trade you can get trade loans. You can take the loan to open a new business or expand an existing one. You can procure anything between Rs. 25000 to Rs. 25 lakh. Factors taken into consideration while sanctioning this loan, is the age of the applicant, his financial position, his ability to repay, tenure of the loan etc. The maximum duration for which the loan is given is 5 years and needs to be repaid through EMI or Equated Monthly Installments or.

The rate of interest depends upon the prime lending rate. The rate is also offered on a fixed or varying basis. If required you may need to furnish collateral security for the loan. This may in the form of mortgage of land barring agricultural land and building. Other guarantees accepted include Government Bonds, National Savings Certificates, Assignment of Life Insurance Policies, Bank’s Term Deposits, approved Shares & Bonds in the name of borrower/partner/ proprietor /director.

This kind of business loan is given to Sole Proprietorships, Partnerships and Private Limited Companies.

Fast Business Loans
If required you can also procure fast business loans. If you have a proven record you may not require long credit verifications. To get the process completed all you need is little paperwork. However, further paperwork and credit checks are needed after the money is delivered in order to close the deal on better terms.
For fast loans you need some documents. These are applicable for both Sole Proprietorship / Partnership Firm. These include:

  • Proof of Identity (Copy of Sales Tax / Service Tax / VAT /Excise Registration Receipt OR Registration under Shops and Establishment Act OR PAN ID / IT Return of the Concern OR Electricity /Water / Municipal Tax Bill in the Name of the Concern OR MAPIN Card in the Name of the Concern)
  • Proof of Individual Identity (Voter’s Identity Card/ Copy of Passport / Driving License/ Photo PAN Card /MAPIN Card
  • Proof of Residence Address (Voter’s Identity Card /Copy of Passport/  /Ration Card/ Driving License /Life Insurance Policy/ /Telephone Bill/ Electricity Bill)
  • PAN Number/Form 60 of the Concern
  • Financial Documents (Copy of P & L Account and Balance Sheet for last two years, audited by a CA and Copies of IT returns for the last two years)
  • Bank Statements for last 6 months
  • Partnership Deed, in case of Partnership Firm)
  • Proof of Place of Business
  • Two passport size photographs

To get fast business loans you need to furnish the above documents. The process of getting the loan can be hastened if you have a recognized guarantor with the bank.

Quick Business Loans
For a Private Limited Company you need the following for quick business loans:

  • Proof of Identity same as above
  • Memorandum and Articles of Association (Copy of Certificate of Incorporation)
  • Proof of Individual Identity for the authorized signatories and 2 directors, including the managing director (Copy of Passport/Voter’s Identity Card/Photo PAN Card/Driving License/MAPIN Card)
  • Board Resolution like copy of Annual Return establishing the shareholding pattern
  • List of Directors
  • PAN Card / Form 60 of the Concern
  • Copy of Form 32 filed with ROC
  • Financial Documents (Copy of P & L and Balance Sheet for last two years, audited by a CA, and Copies of IT returns for the last two years)
  • Proof of Place of Business
  • Bank Statements for last 6 months
  • Two passport size photographs

Banks Providing Business Loans in India
All nationalized and private banks provide business loans to traders. To get loans from the state banks is quite tedious and cumbersome. However private banks provide loans with less hassle.