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    4 Ways of Obtaining Finances for a Business Start-up

    A business start-up is always an ambitious project by anyone. It takes a lot of effort in terms of time and money. In many cases, individuals are willing to put in the time, however, do not have sufficient financial backing. There is hope though.

    In today’s world, several methods are available to obtain the necessary funds for your business start-up. Here are 4 popular methods.

    Microloans

    Microloans are aimed at entrepreneurs who have just started operations, which is why these loans possess less stringent conditions. Moreover, a bank loan of this nature often involves small amounts that can be repaid by the entrepreneur.

    The ‘Diriya’ microloan offered by HNB FINANCE is a great option for business start-ups. With this small business loan, you can obtain a loan value from LKR 50,000 to LKR 300,000 without much hassle. You are also given the benefit of lower loan interest rates. Moreover, you can repay the loan on a weekly or monthly basis, and can be done over a period of 24 months.

    SME and SSE Loans

    These loans generally involve higher amounts and possess strict protocols, when compared to microloans. HNB FINANCE offers various loans for SME and SSE with the aim of growing them.

    Our ‘Easy Loan’ is a type of SSE loan (Small Scale Enterprise loan) that is ideal for those looking for urgent working capital. Here, you can obtain a maximum loan amount of LKR 10 million. This facility is made to provide the necessary funds in a short time therefore, allowing the entrepreneur to continue operations as usual. For this, we provide doorstep service, simple and convenient documentation, along with flexible repayment and competitive interest rates. Our ‘Swashakthi’ loan facility is similar, except that it deals in lesser amounts, and possesses more flexible terms and conditions.

    A business loan like our ‘Saviya’ facility is geared towards the start-ups that are looking to expand their capital and scale of operations. Much like our SSE loans, this SME loan (Small and Medium Enterprise loan) allows you to obtain funds with minimal documentation, doorstep service, and personalised services by our trained staff. Additionally, you also have the opportunity to obtain a maximum loan of LKR 20 million, along with having a flexible repayment period that can go up to 5 years. This is ideal for the entrepreneur who is willing to become more established in their industry.

    Venture Capital Investors

    When it comes to small business start-ups, the risks taken by the entrepreneurs in securing finances are quite significant. However, these risks are always calculated.

    One of the newer methods to reduce risks is finding investors. Sometimes called ‘angel investors’, these individuals or firms look to diversify in different industries through start-ups. This entails them to provide finance for businesses with the view of earning a portion of the profits in the future. Think of it as a loan. In place of paying bank loan interest rates, you will have to pay the investors an equity share.

    Finding an investor that shares the same vision can be difficult though, especially when you have just founded your start-up company. It requires you to do research, and several rounds of negotiation with them to come to the right terms and conditions.

    Crowdfunding

    An innovative method of reducing the risk of a start-up is crowdfunding. This is not your typical investment, as finances come in from several people. These finances often come in small amounts.

    One of the reasons for its low risk is that crowdfunders do not obtain any control of your start-up. However, they do expect a gift, or some sort of credit given to them when the product is launched.

    One of the major drawbacks of this type of financing is that it is time-consuming. Moreover, it can be difficult to convince the average individual about how innovative your product is.

    There are several other ways of obtaining finances for your start-up, however, if you are looking for more controlled solutions, the methods mentioned above are highly recommended. If you are looking for a business loan, you can check out what we have to offer. Do contact us if you have any questions about our services. After all, we want to see you succeed in your venture!