Startups are one of the most underrated yet biggest contributors to the Indian economy. Though startups are considered to be small businesses, reports say that they have generated a revenue of $50 billion since 2014, through thousands of deals. Many young entrepreneurs are resorting to startup businesses as opposed to working in tech giants or conglomerates, as a startup has all the perks of autonomy, personalization, team and work culture, creative freedom, and most importantly, a plethora of government policies to boost startup funding through venture capital. Additionally, the ease of availing a business loan for startups in India has made the country the third most favorable ecosystem to establish new businesses.
Startup funding in India
For every ambitious entrepreneur aspiring to start a new business, funds are the first and foremost concern. Startup funding is essential to kick off or even accelerate your small business growth. A startup would require funds for things like product development/creation, team recruiting, office space, computer systems, or funding to cover expenses like electricity, working capital, buying software, covering legal and consulting experiences, licenses and certificates, etc. Mostly startup funding is addressed by venture capital, government grants, crowdfunding, or angel investors who are interested in startup investment. But the most popular type of funding is taking a business loan for startups. Depending on the size of your business you would choose to take a small business loan or other types of business loans offered by lenders.
Business loan for startups
A business loan for startups is one of the financing options sought after by young company founders where the money is given in return for collateral, to help kickstart a business with no business history or even to help grow the business. An instant business loan is also sought after to pull startups out of financial stress
Though there are sources of funding such as private equity and debt financing in India, getting a business loan for startups in the early stages can be quite a challenge. Reports claim that a minuscule figure of just 5% of SMEs in India have access to formal credit. To address this gap, the Indian government rolled out a program offering 10,000 crore rupees business loans to startups through authorized lenders. Some of the popular government business loans are Mudra loans, MSME business loans for startups in 59 minutes, Credit Guarantee scheme etc.
Apart from banks, there are many Non-Banking Financial Institutions too which provide business loans for startups at attractive interest rates, varying loan limit, tenure, repayment options, and collateral requirements. Taking startup loans is a great option when seeking startup funding because venture capitalists might exert pressure on the growth stage of the company, demanding 5 or 10 times higher returns on their investment.
Before approaching any financial institution, a startup loan borrower must chart out a proposal with details of their business size, plans, revenue model, estimated growth and sales to convince the lender of the amount you need.
Eligibility for taking a business loan for startup
- Applicant should be above 18 years of age but less than 65 years of age
- The founder of the startup or borrower should be an Indian citizen with no criminal record
- The applicant should have a business proposal in place
- Startup must be registered as a public or private company, sole proprietorship or partnership
- The applicant of the startup loan must have a good credit score
- The startup should have acquired the necessary license and permits to operate
Gold loan for startup funding
Seeking business loans for startups can sometimes be quite tricky as the sanctioning of the required loan amount depends completely on the lender’s discretion and whether they are convinced with your startup proposal. It is for this reason that taking a gold loan to fuel your startup aspirations is an excellent alternative to taking a business loan.
What is a gold loan
A gold loan is a process where a bank or NBFC offers you a loan amount in exchange for gold as collateral. It is a secured loan meaning an asset is submitted as security in exchange for the loan amount. A gold loan is the most preferred method of funding for small businesses or startups as they are quite lenient with credit history or CIBIL score. Be it to fund your working capital, to purchase raw materials, obtain licenses, or even to hire employees, you could always pledge an equivalent amount of gold and avail the loan amount to fund your startup dreams. While both banks and non-banking institutions give gold loans, banks are slightly more rigid with repayment options and interest rates. Popular NBFCs like Rupeek play a crucial role in offering customer-friendly gold loans and hence are favourable.
Rupeek is an RBI certified gold loan company that offers simplified and affordable loans to individuals and businesses to meet their financial requirements. Our end-to-end online loan application process gives the customer the ultimate hassle-free borrowing experience. Let us break down the fast and convenient loan application process at Rupeek for you
- Calculate the interest rate for the loan amount with Rupeek’s gold loan calculator
- Apply online for the required loan amount
- Rupeek loan officers visit your home to do the gold evaluation and KYC
- Complete your KYC process within minutes
- Pledge your gold safe and securely with Rupeek
- On completion of instant documents verification, the requested loan amount will be credited to your bank account
There are several advantages and benefits of taking a gold loan for a business from Rupeek. The most user-centric advantage being minimal scrutinization of credit score since the gold is held as collateral against the amount borrowed. A credit score analyses your creditworthiness according to your loan repayment history. Rupeek simply offers the loan amount against the gold pledged and does not require exhaustive documentation. This makes it hassle-free for every aspirant to kickstart their startup with a gold loan. We offer high per-gram rate for the gold pledged, giving you maximum loan-to-value. As if these reasons weren’t just enough to take a loan at Rupeek, the flexible tenure options are another crowd-puller. Customers can choose a short-term loan period like 6 months- 1 year or a long term tenure of 2 years and above as well to suit their repayment abilities. Rupeek is hands down the best option for startup funding.