8 Best Business Funding Solutions in India 2021

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Any business needs funding for maintaining its daily operations, expansion, and other requirements. Whether you are starting a business or already a small business owner you need to think about funding.

Traditionally business loans availed from banks and NBFCs are the best way for small business financing.  But, banks have strict conditions that everybody can’t meet. In this scenario, small businesses should look for other options for funding.  

Go on to read about the small business financing solutions available in the market.  

8 Best Business Funding Solutions in India You Can Try in 2021

Business loans 


Business loans specially designed for small businesses are the best way to get funding. You can get a loan without security online. There are separate business loans for machinery and equipment purchase, business and infrastructure expansion. 

If you have land and assets then availing a secure business loan is the best option. You can also get unsecured and collateral-free business loans from lenders.

The business loan interest rate depends upon the financial institutions that you are opting for. Government Business loans have lower interest but are mostly secured.  

Use your saving or seek help from family and friends 


Your friends and family are the once, who can understand your business strategy well. Ask those friends and family who have surplus money to invest in your business. If you are borrowing money from your friends and family prepare the terms of repayment clearly.

It is possible that you can get an interest fee sum from them and that can be a real advantage. On the other hand, you can use your own savings and investment to sustain your business. 

Don’t push everything you have in the business. You should always preserve an emergency fund.  

Lines of credit 

Lines of credit are a great option for small business financingIt works like a credit card where you have access to certain amounts. Financing companies make regular payments and small business owners can withdraw money whenever needed.


The business loan interest rate of the Line of credit is higher than banks but lower than credit cards.  

Take order and get financing 

Small businesses generally don’t want to increase bank debt or selling equity. Taking orders and getting finance is a fast and flexible option. Through these process producers, distributors, and wholesaler suppliers can grow their business and make more profit. It also increases the market sharing.  

Crowdfunding 

Crowdfunding is a boon for small business financing. To get started with a small business, it needs to disclose its idea for which they want to have funds.

They can reach out to investors through online lending portals. It can be made reward based which provides a reward to investors on revenue or either debt or equity.  

Venture Capital 


Venture capitalists invest in a small business that is nothing but high potential for growth. Majority of the venture capitalists asks for a mix of equity and debt financing.  

Trade Creditors 

As a small business, you are associated with many manufacturers and distributors. They can give you with short-term small business loans. They can be convinced to not charge you for their services until you make profits.

Once you are done paying your trade creditors and buy their trust, you can suggest for longer small business loans. You can also convince them for an easy payment term by disclosing your potential.  

Angel Investors 

Angel Investors have surplus money and are keen to provide small business loans to profitable ventures. Make a promising proposal to them. If they are glued up to your planning they can also offer to mentor apart from a business loan. Indian Angel Network, Mumbai Angels, and Hyderabad Angles are some top investors providing easy business loans.

Frequently Asked Questions  

How can a small business get free funding? 


Some State or local governments give economic development grants.  Check with your local and state governments for free funding opportunities.

How can I raise funds for my business? 

Small business loans are one of the best way to fund your business. Many banks and NBFCs provide easy online business loans. You may also opt for crowdfunding. 

How to ask for money to start a business? 

You need to be confident about your business. Prepare a well-crafted business plan that can show your real potential. You must conduct research on the investors before contacting them for small business loans.  

What are the best sources of finance? 

Some of the best sources of finance for businesses are business loans, equity, debt, debentures, mudra loan, venture funding, and term loans.  

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