Retail businesses have witnessed a massive expansion in the Indian Market in recent times. Since establishing a retail business requires a comparatively low investment, it has become a popular choice amongst the entrepreneurs. If you are looking forward to starting your own business, you should keep a check on all the important aspects related to it. One of the crucial factors while establishing a business is to organize adequate funds for the same. Availing a traditional business loan for starting a retail business can be extremely tough. Since most of the financial institutions check the past performance of the business before approving a traditional business loan, availing it for a start-up can be difficult. There are other ways to get financial help for business. Below is a list of other financing options for a retail business.
A personal loan is a multipurpose loan and can be used to fulfill all kinds of financial needs including setting up your business. With leading banks and NBFCs, it is possible to avail unsecured personal loans. This keeps your valuable assets secure as you are not required to pledge any collaterals while applying for an unsecured personal loan. By comparing various loan offers by different financial institutions, you can avail a personal loan at the most competitive interest rate. You also get the option to customize your loan according to your requirements.
Equipment financing is used to purchase business-related equipment. An equipment loan is self-secured as the equipment you purchase serves as the security of the loan. It is possible to obtain 100% financing for the purchase of the equipment through equipment financing. Easy eligibility criteria and hassle-free application process are some of the added advantages of equipment financing.
Angel investments involve people referred to as Angel Investors. These are people with healthy reserves of cash who are keen to invest in different upcoming businesses. Apart from providing funds, angel investors also provide mentoring for businesses.
Line Of Credit
A line of credit is an agreement between the financial institution and the entrepreneur where the lender assures to lend a certain amount of money to the entrepreneur. In case of line of credit, the loan amount can be withdrawn in small installments. The interest has to paid only on the withdrawal amount and not the total loan sanctioned. Line of credit usually come for longer duration and have flexible repayment options. All these features make the business line of credit a popular source of funding for retail businesses.
Home Equity Loan
You can avail a home equity loan by keeping the equity or share of your home as collateral. A home equity loan is a secured and multipurpose loan that can be a great financing option for retail businesses.
Now that you are aware of various financing option, ensure that you make the best choice for yourself. Lastly, do not forget to read the terms and conditions of your loan agreement carefully before signing it.