Ways to Small Business Loans

19th Aug 2010
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Before an angel investor notices you or a VC decides you have something worthwhile going on you need to find seed capital. It is all good when you throw around ideas but making something tangible takes dough.  Now if your pockets are not so deep here are some ways to find the Small Business Loans you need.

Bank loans- From the SBI to the bank of Baroda they all offer small business loans. It requires a bit of paperwork and a bit of a search to find interest rates that suit you. Loans as small as Re.25000 to 50 lakhs can be had. Proof of ability to repay and collateral are the norm here so look before you leap…

Personal Loans- Usually Entrepreneurs can find ready investors in their near and dear ones. Family is usually willing to pitch in when they know that the idea will work and sometimes they pitch in even when they know it might fail. However sometimes business affects personal ties and vice versa so this is not always a great idea esp. if your Family watches too much “Ekta Kapoor”.

Credit – Taking out a business credit card is one road you do not want to do down. It’s all right if you can pay it back on time but one miss and you are a goner. With 20% interest rates and all sorts of fine print, credit can hit you back and cripple you.

MicroFinancing- It’s now easy for small business owners to find small business loans. The payments are not much of a pinch either and the whole system works… Have a look at http://www.kiva.org/ to get a feel of things or wiki it to know more…

Personal funds- You might have a bit of money from your PF or maybe a fixed deposit that has matured that you can use. Many have taken this route and believe that it is the most independent one. No banks, partners or creditors of any kind, just the risk of losing your life savings. Then again no entrepreneur would be silly enough to put all their money on one bet…

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