Negosentro|A Startup is a firm that is driven by the motive of meeting the demand of the market or the people through their product. However, they are companies in their initial phase of operations and often categorized as MSMEs. In order to capitalize on the product, they need a minimum investment in the first place. The investment group which comes to believe in this product provides the needed capital and voila, the revenues are generated. Though the catch here is that this process is taking a turn in terms of business loans in Bangalore and read ahead to learn the boost of them in the city.
What is a business loan for an MSME?
MSME stands for Micro, Small and Medium Enterprises and they are defined mainly on the level of investment they require. For a Microscale company, the cost of the machinery should be between 10 and 25 lakhs whereas, for a small scale, it should be more than 25 lakhs and less than 5 crores. Moving onto the Medium scale, the cost of plant and machinery should not cross the bill of 10 crores. Now, when an idea to develop a unique product is brought up which requires investment in any of these categories, this is where the business loan comes into the picture. For a city like Bangalore which is home to many technical and non-tech start-ups of the country like OYO, Flipkart, and others, it does have a great scope for the growth of novel ideas along with competition. Though with the recent attention received, the start-up ecosystem has been boosted for business loan. And believe it or not, despite the great competition, any MSME can now avail business loan in Bangalore for their enterprise out of the many ways mentioned below.
Ways to get Business loans in Bangalore
Out of the several options that have come up so far, it is tough to sort out the reliable ones. But this job has just been made easier with the given list of options to avail business loans for MSMEs:
Business loans in Bangalore from banks
Yes, it might be the most common option to go for a business loan but it is still one of the most reliable ones. Observing the great pace of start-up developments in the country and most of them residing in the IT city, banks have come up with different ways and plans to provide required finances for the MSMEs. They either make way for the working capital loan or the funding. In the former, a loan is provided which is enough to run one complete revenue cycle of the company and in the latter, factors like valuation details, business plans, and project reports are required. Either way, banks are willing to fund an upcoming great deal.
Government sanctioned loans
The growth of these start-ups has been no secret and that is the reason even the government of Karnataka has stepped up for lending of business loans in Bangalore. Yes, now the government is ready to fund an MSME provided you meet a certain set of conditions laid by them. Some of them are required to register under the Karnataka Shops and Commercial Establishment Act, 1961, and pay taxes to them. With this, the government of Karnataka not only sees an opportunity to increase the number of jobs but also to attract talent and provide promising MSMEs the right place to work and grow.
Online lending platforms
This might be a new option but it is indeed a really good one in terms of generating the right funding and seeking great advice to boost the start-up ecosystem. The process of availing business loans in Bangalore through reliable and licensed online lending platforms like Indifi is proving to help tip in the right company at the right time. They are different from the above-mentioned modes of cash inflow and charge low-interest rates with flexible repayment terms and making them collateral-free in some cases. All an MSME requires is a vintage period of a minimum of one year, the registration number of the company and the person or team owning the product meets the legal age for being involved in a business.
Angel investment is one of the most popular ways to avail a business loan in Bangalore these days by the MSMEs. One can say that these investors have proven to be angels for many successful businesses out there in the IT city of the country with not much of a hassle. On the other hand, the definition of an angel investor defines him or her as a financial funder for the start-up. The person is a private investor with a net worth high enough to back some company with it. They aim at high returns through methods differing from the conventional ones.
Consider the option of Crowdfunding
So far the options have been placing one investor in the position of enjoying the high returns but the scenario changes when it comes to the Crowdfunding method. It is a new and fast emerging method of raising an investment among entrepreneurs today. It puts more than one investor’s money into play for the start-up unless the minimum value required is achieved. For this, the start-up has to provide details of business plans, the amount of funding required, the reasons, and the means to reap profits so as to attract an investor on the crowdfunding platform for business loans in Bangalore.
A word of advice
As these top preferred and reliable methods are listed above to make sure to get the funding for an MSME from the trusted resources, it is time to select the right one. There has to be a balance between market opportunities and fast options of growth for an MSME. These two parameters are the base to decide which method of raising a business loan in Bangalore is right for a specific start-up belonging to any industry. So make a note of them and get the best assistance for an upcoming great business. For more information, you can also tap into the website of Indifi as they provide complete assistance and efficient services in providing customized business loans.