How to Raise Funds for Business in India?


Are you an aspiring entrepreneur looking to start your own business in India? One of the biggest challenges faced by most startups is funding.

Without adequate funds, it can be difficult to get your business off the ground and make it successful in today’s competitive market. Fortunately, there are several ways to raise funds for your business in India.

How to Raise Funds for Business in India?

In this article, we will take a look at some of the most effective methods that entrepreneurs can use to fund their startup ventures.

Whether you’re just starting out or looking to expand your existing business operations, these tips can help you secure the financial support needed to achieve your goals. Let’s dive in!

Government Loan Schemes for Funding

The Indian government has taken several steps to promote entrepreneurship and small businesses in the country.

One such step is providing loan schemes for funding to eligible individuals or entities. These loan schemes come with attractive interest rates, flexible repayment options, and longer repayment periods.

One of the most popular loan schemes is Mudra Yojana, which provides loans up to Rs. 10 lakhs for micro and small enterprises.

The Pradhan Mantri MUDRA Yojana aims to provide funding to those who need funds for non-farm income-generating activities in manufacturing, trading, or services sectors.

Another scheme is Stand-Up India Scheme that encourages entrepreneurship among women and SC/ST entrepreneurs. It offers a composite loan between Rs. 10 lakh -1 crore for greenfield projects via banks.

Moreover, Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) enables first-time entrepreneurs with no collateral security requirements while availing credit facilities from banks under this scheme up to ₹2 crores.

These government-funded loan schemes have helped many aspiring entrepreneurs turn their ideas into successful businesses by providing them with much-needed financial support at an affordable rate of interest with minimal collateral requirements!

Corporate Funding

Corporate Funding is a type of funding where businesses receive investment from corporations or large companies.

Corporations usually invest in smaller businesses that show potential for growth and profitability in the long run.

The advantage of corporate funding is that it provides a significant amount of capital to smaller businesses, which allows them to expand their operations and increase their market share.

Furthermore, corporations can also provide valuable expertise, networks, and resources to support business growth.

However, corporate funding also has its disadvantages. Companies that receive corporate funding may have less control over their business decisions as they are accountable to the investors who provided the funds.

Additionally, some corporations may only invest in specific industries or sectors which could limit opportunities for other types of businesses.

Despite these drawbacks, many startups and small enterprises consider corporate funding as an attractive option due to the benefits it brings.

Therefore, before deciding on whether to pursue this type of fundraising strategy or not, entrepreneurs must weigh both advantages and disadvantages carefully while keeping their goals in mind.

Individual Funding

Individual Funding is a popular way of raising funds for business in India. This method involves pitching your business idea to individuals who are willing to invest their money in return for a share of the profits or ownership.

One advantage of individual funding is that it allows you to retain control over your business as the investors only have a small stake.

Additionally, the terms and conditions can be negotiated between you and the investor, which provides flexibility compared to other forms of funding.

To attract individual investors, you need to pitch your business with a solid plan that outlines its potential for growth and profitability.

You also need to communicate effectively and build relationships with potential investors by addressing their concerns and answering their questions honestly.

Keep in mind that individual funding comes with risks as there’s no guarantee that your investment will yield returns.

However, if done correctly, it could be an excellent way to raise funds while retaining control over your business.


Crowdfunding has emerged as a popular way of raising funds for businesses in India. It involves reaching out to a large number of people through social media and other online platforms to raise money for the business.

The best thing about crowdfunding is that it does not require any collateral or security, making it an attractive option for small businesses.

Crowdfunding can be done through various platforms such as Kickstarter, Indiegogo, Ketto and Milaap.

These platforms allow entrepreneurs to create their profile and upload details about their project along with the funding goal. Interested investors can then contribute towards the campaign by making donations.

The success of a crowdfunding campaign depends on how well it is marketed and promoted. Entrepreneurs need to have a clear idea about their target audience and reach out to them through social media channels like Facebook, Twitter and Instagram.

Another advantage of crowdfunding is that it allows entrepreneurs to validate their ideas before bringing them to market.

By testing market demand through crowdfunding campaigns, entrepreneurs can avoid costly mistakes down the line.

Crowdfunding has become an important source of funding for Indian businesses. With its low barrier entry and ability to connect with potential investors across different geographies at minimal costs – Crowdfunding creates opportunities galore!

Avail Small Business Loans from NBFCs

Small business loans are a great option for entrepreneurs who want to take their business to the next level.

However, not everyone can qualify for a loan from traditional banks due to strict eligibility criteria and long processing times. This is where Non-Banking Financial Companies (NBFCs) come into play.

NBFCs offer small business loans that are designed specifically for businesses with limited financial resources or less than ideal credit history.

These loans are easier to obtain and have faster processing times compared to those offered by traditional banks.

Another advantage of availing small business loans from NBFCs is that they offer flexible repayment options according to your specific needs and requirements.

Moreover, these companies provide personalized services which makes it easier for you to get the right financing solution.

However, before taking out a loan from an NBFC make sure you thoroughly research their terms and conditions including interest rates, penalties, fees etc.It’s important to understand all aspects of borrowing funds before signing any agreement or contract.

If you’re looking at expanding your small business but don’t have enough capital then consider getting in touch with an NBFC today!

Business Credit Cards

Business Credit Cards are one of the most popular ways to raise funds for a business in India. These credit cards offer an easy and convenient way to access funds without having to go through any lengthy application process.

With Business Credit Cards, you can easily manage your expenses and keep track of your spending. Most banks also offer rewards programs that allow you to earn points or cashback on your purchases, which can be used towards future expenses.

One advantage of using Business Credit Cards is that they can help build your business’s credit score. By making timely payments and keeping a low balance, you can improve your creditworthiness and increase the chances of getting approved for other loans in the future.

However, it’s important to use Business Credit Cards responsibly as high-interest rates may apply if balances aren’t paid in full each month.

Additionally, overspending on these cards could lead to debt accumulation that might harm your business finances in the long run.

If used properly, Business Credit Cards can be a great tool for raising funds and managing expenses for small businesses in India.

Online Crowdfunding portals

Online crowdfunding portals have become increasingly popular in recent years as a way to raise funds for businesses.

These platforms allow entrepreneurs to pitch their ideas and receive contributions from individuals all over the world.

One of the biggest benefits of using online crowdfunding portals is that it gives small business owners access to a large pool of potential investors.

These platforms typically work by allowing entrepreneurs to create an account and then post information about their business or project, including financial projections, marketing plans, and other relevant details. Investors can then browse through these projects and decide which ones they want to support.

Many online crowdfunding portals offer different levels of rewards depending on how much an investor contributes.

For example, someone who invests $100 might receive a free T-shirt or other merchandise related to the project.

However, it’s important for entrepreneurs to keep in mind that not all crowdfunding campaigns are successful. It takes time and effort to build up a following on these platforms, so it’s crucial for business owners to be active in promoting their campaign both online and offline.

If done correctly, online crowdfunding can be an effective way for small businesses in India to raise funds without having to rely solely on traditional financing methods such as bank loans or angel investors.


Raising funds for your business in India can be a challenging task. However, with the right knowledge and resources at your disposal, it is definitely possible.

The government loan schemes offer attractive interest rates and flexible repayment options to support budding entrepreneurs.

Corporate funding can provide a quick injection of capital but may come with strict terms and conditions. Individual funding from friends and family members is often the easiest way to get started.

Crowdfunding has emerged as a popular alternative for start-ups looking to raise funds without giving up equity or taking on debt.

Online crowdfunding portals have made it easier than ever before to reach out to potential investors and showcase your business idea.

Small business loans from NBFCs are an excellent option if you need additional financial support beyond what traditional lenders can offer. Business credit cards can help cover day-to-day expenses while building your credit score.

All in all, there are many ways to fundraise for your Indian startup or small business venture. Careful planning and research will go a long way towards ensuring success!

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