{"id":718,"date":"2020-06-29T15:37:37","date_gmt":"2020-06-29T10:07:37","guid":{"rendered":"https:\/\/open.money\/blog\/?p=718"},"modified":"2023-07-05T14:48:11","modified_gmt":"2023-07-05T09:18:11","slug":"get-additional-capital-sources-for-your-business","status":"publish","type":"post","link":"https:\/\/open.money\/blog\/get-additional-capital-sources-for-your-business\/","title":{"rendered":"How to score additional capital sources for your business"},"content":{"rendered":"<span style=\"font-weight: 400;\">Scoring powerful funding <\/span><span style=\"font-weight: 400;\">has always been a <\/span><span style=\"font-weight: 400;\">curveball for businesses, but to bank that in a pandemic is totally a different <\/span><span style=\"font-weight: 400;\">ball game.<\/span><span style=\"font-weight: 400;\">\u00a0<\/span>\r\n\r\n<iframe loading=\"lazy\" title=\"How to score additional capital sources for your business\" width=\"1200\" height=\"675\" src=\"https:\/\/www.youtube.com\/embed\/o8rR7pnwssE?feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" allowfullscreen><\/iframe>\r\n\r\n<span style=\"font-weight: 400;\">The economy is going through turbulence. And that <\/span><span style=\"font-weight: 400;\">has made <\/span><span style=\"font-weight: 400;\">the availability of capital for your business thousand times more challenging. <\/span><span style=\"font-weight: 400;\">But all is not lost &#8211; all you need to do to get your business hustling again is to look for smart and focused sources of capital.<\/span>\r\n\r\n<span style=\"font-weight: 400;\">Make the right choices according to your financing needs &amp; current financial situation, and you can come out of this victorious.\u00a0<\/span>\r\n\r\n<span style=\"font-weight: 400;\">Of course, the first level of funding revolves around the optimisation of receivables and spends. Post that, here\u2019s a rundown of all the key capital sources that you need to be on the lookout for, to beat these uncertain times:<\/span>\r\n<h2><span style=\"font-size: 24pt;\"><b>What &amp; where to look for <\/b><b>smart sources of capital<\/b><\/span><\/h2>\r\n<h3><span style=\"font-size: 18pt;\"><b>1. Your own network<\/b><\/span><\/h3>\r\n<span style=\"font-weight: 400;\">It\u2019s a no brainer that whenever we are running low on cash, friends &amp; family are the first people we reach out to. Well, this isn\u2019t any different &#8211; if you think they can back you up &amp; get your business running then go ahead and reach out to them. That being said, you need to gauge their situations too in this plummeting market &amp; be sure you don\u2019t tarnish the relationship with your close-knit family &amp; friends.<\/span>\r\n\r\n<span style=\"font-weight: 400;\">O<\/span><span style=\"font-weight: 400;\">ther entrepreneurs in your <\/span><span style=\"font-weight: 400;\">business circle, especially those who know the sector and your abilities well, are a strong probable source too.\u00a0<\/span>\r\n\r\n<b><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-722 size-full\" src=\"https:\/\/open.money\/blog\/wp-content\/uploads\/2020\/06\/1400-x-800-px_quote_1.png\" alt=\"Deena Jacob, Co-founder &amp; CFO, Open Financial Technologies on scoring additional capital sources in Covid-19 | Open\" width=\"1401\" height=\"801\" srcset=\"https:\/\/open.money\/blog\/wp-content\/uploads\/2020\/06\/1400-x-800-px_quote_1.png 1401w, https:\/\/open.money\/blog\/wp-content\/uploads\/2020\/06\/1400-x-800-px_quote_1-300x172.png 300w, https:\/\/open.money\/blog\/wp-content\/uploads\/2020\/06\/1400-x-800-px_quote_1-1024x585.png 1024w, https:\/\/open.money\/blog\/wp-content\/uploads\/2020\/06\/1400-x-800-px_quote_1-768x439.png 768w\" sizes=\"auto, (max-width: 1401px) 100vw, 1401px\" \/><\/b>\r\n<h3><span style=\"font-size: 18pt;\"><b>2. Government schemes &amp; grants<\/b><\/span><\/h3>\r\n<span style=\"font-weight: 400;\">The government of India has announced various modes of financial aids to uplift SMEs, MSMEs &amp; startups to battle COVID-19. The top two initiatives you should definitely be up to speed are:\u00a0<\/span>\r\n<h4><span style=\"font-size: 14pt;\"><b>(i) Collateral free automatic loan to MSMEs \/ Rs 3 lakh crore credit guarantee scheme for MSMEs:<\/b><\/span><\/h4>\r\n<span style=\"font-weight: 400;\">Financial institutions like banks &amp; NBFCs have been directed to give an emergency credit line up to 20% of the existing loan to borrowers with loans upto 25 crores and turnover upto 100 crores. T<\/span><span style=\"font-weight: 400;\">he tenure is for four years with a moratorium of one year.\u00a0<\/span>\r\n\r\n<img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-724\" src=\"https:\/\/open.money\/blog\/wp-content\/uploads\/2020\/06\/1400-x-800-px_quote_2.png\" alt=\"Deena Jacob, Co-founder &amp; CFO, Open Financial Technologies on scoring additional capital sources in Covid-19\" width=\"1401\" height=\"801\" srcset=\"https:\/\/open.money\/blog\/wp-content\/uploads\/2020\/06\/1400-x-800-px_quote_2.png 1401w, https:\/\/open.money\/blog\/wp-content\/uploads\/2020\/06\/1400-x-800-px_quote_2-300x172.png 300w, https:\/\/open.money\/blog\/wp-content\/uploads\/2020\/06\/1400-x-800-px_quote_2-1024x585.png 1024w, https:\/\/open.money\/blog\/wp-content\/uploads\/2020\/06\/1400-x-800-px_quote_2-768x439.png 768w\" sizes=\"auto, (max-width: 1401px) 100vw, 1401px\" \/>\r\n<h4><span style=\"font-size: 14pt;\"><b>(ii) Fund of funds for MSMEs:<\/b><\/span><\/h4>\r\n<span style=\"font-weight: 400;\">This is an equity funding that\u2019s announced by the government to help MSMEs with \u2018growth potential and viability\u2019, even as <\/span><span style=\"font-weight: 400;\">they are faced with <\/span><span style=\"font-weight: 400;\">severe shortage of equity. The fund of funds will infuse Rs 50,000 <\/span><span style=\"font-weight: 400;\">in equity, thus catering to over 25 lakh MSMEs.<\/span>\r\n\r\n<span style=\"font-weight: 400;\">Not just these, there are other steps taken by the government to accelerate the growth of SMEs &amp; MSMEs. These include:<\/span>\r\n<ul>\r\n \t<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The MSME receivables from Govt.\/CPSEs will be released in 45 days.<\/span><\/li>\r\n \t<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The e-market linkage to MSMEs will be promoted in place of trade fairs\/exhibitions. <\/span><span style=\"font-weight: 400;\">This data will then be<\/span><span style=\"font-weight: 400;\"> used to enhance trade based lending.<\/span><\/li>\r\n \t<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">TDS rate <\/span><span style=\"font-weight: 400;\">has been <\/span><span style=\"font-weight: 400;\">reduced by 25% across the board, thus freeing up money that could have otherwise been blocked.<\/span><\/li>\r\n<\/ul>\r\n<h3><span style=\"font-size: 18pt;\">3. <b>Traditional loans &amp; dynamic scoring models from new age fintechs<\/b><\/span><\/h3>\r\n<span style=\"font-weight: 400;\">Now if yours is a business that doesn&#8217;t make the cut for the financial assistance provided by the government &#8211; don&#8217;t lose heart. There are numerous ways to keep your business afloat on a sea of unpredictability.<\/span>\r\n\r\n<span style=\"font-weight: 400;\">For instance, <\/span><span style=\"font-weight: 400;\">you can always opt for<\/span><span style=\"font-weight: 400;\"> traditional streams of cash flow like business term loans and lines of credit. They have always been a great option for mature businesses that are now strapped for cash. Today not many businesses qualify for a business loan due to various factors. Primarily their inability to assess business health from a 360 degree, due to lack of data and history. Given that, this is one option that most businesses can fall back on to fund their operations.<\/span>\r\n\r\n<span style=\"font-weight: 400;\">Moving ahead,\u00a0 you are sure to <\/span><span style=\"font-weight: 400;\">find funding<\/span><span style=\"font-weight: 400;\"> in one of the many alternatives through fintech lenders including peer-to-peer lenders who offer loans on cash-flow based lending and have products on offer including moratorium for upto 3 months. These options are built to offer more flexibility and in most cases lead to faster disbursement of the funds.\u00a0<\/span>\r\n\r\n<span style=\"font-weight: 400;\">Open\u2019s credit offering is a classic example where we match the demand to the right source based on cash-flow and other macro economic factors apart from historical data. We have a unique proposition that brings together various sources of capital including banks, NBFCs and peer-to-peer lenders &#8211; to craft products suited for each segment and for each stage of their business cycle.<\/span>\r\n\r\n<span style=\"font-weight: 400;\">We\u2019re also backing businesses by helping them get back stronger in the game with timely back-to-business loans. These <\/span><a href=\"https:\/\/open.money\/products\/term-loan?utm_source=wordpress&amp;utm_medium=blog&amp;utm_campaign=AdditionalCapital\"><span style=\"font-weight: 400;\">quick loans up to Rs 1 lakh<\/span><\/a><span style=\"font-weight: 400;\">, come at zero EMI for the first three months and the funds will get credited to your account in just 72 hours!\u00a0\u00a0\u00a0<\/span>\r\n<h3><span style=\"font-size: 18pt;\">4. <b>Venture capital and venture debt<\/b><\/span><\/h3>\r\n<span style=\"font-weight: 400;\">No doubt venture capital and venture debt are the default funding options for most businesses.<\/span>\r\n\r\n<span style=\"font-weight: 400;\">However, <\/span><span style=\"font-weight: 400;\">in times like this, the key is to demonstrate your ability to navigate through the current state of affairs with strategic thinking, speed and execution. Businesses need to respond to situations proactively and have a resilient long term business model in place. Venture debt should help you extend your runway, if you are already sitting on decent cash flows.<\/span>\r\n\r\n<img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-721 size-full\" src=\"https:\/\/open.money\/blog\/wp-content\/uploads\/2020\/06\/1400-x-800.png\" alt=\"Deena Jacob, Co-founder &amp; CFO, Open Financial Technologies on scoring additional capital sources in Covid-19 | Open\" width=\"1401\" height=\"801\" srcset=\"https:\/\/open.money\/blog\/wp-content\/uploads\/2020\/06\/1400-x-800.png 1401w, https:\/\/open.money\/blog\/wp-content\/uploads\/2020\/06\/1400-x-800-300x172.png 300w, https:\/\/open.money\/blog\/wp-content\/uploads\/2020\/06\/1400-x-800-1024x585.png 1024w, https:\/\/open.money\/blog\/wp-content\/uploads\/2020\/06\/1400-x-800-768x439.png 768w\" sizes=\"auto, (max-width: 1401px) 100vw, 1401px\" \/>\r\n\r\n<span style=\"font-weight: 400;\">During such periods of economic downturn, getting VC backing is no easy feat. However, the good news is that the overall inflow in VC funding amidst these trying times have been close to USD 1Bn &#8211; though it is relatively smaller compared to the whole of last year and 50% of what Q1 2020 saw.<\/span>\r\n\r\n<span style=\"font-weight: 400;\">Things are definitely going good for education, healthcare, and agritech as they have seen very early stage findings. Growth-stage companies have also managed to receive funding &#8211; especially the ones who are tiding strong over the current crisis and those who have managed to fuel growth in sectors like supply chain and neobanking. This makes one thing clear &#8211; if need be considered<\/span><a href=\"https:\/\/bit.ly\/31boNIH\" target=\"_blank\" rel=\"noopener\"> <span style=\"font-weight: 400;\">pivoting your business model<\/span><\/a><span style=\"font-weight: 400;\"> or maybe even venture out into something new. You never know, you might just find a VC who will back you up to achieve your dream.<\/span>\r\n\r\n<span style=\"font-weight: 400;\">So yes, things seem to be looking up as a few venture capitalists are riding the storm and are gearing up to add on to their existing portfolio.<\/span>\r\n<h2><span style=\"font-size: 24pt;\"><b>Time to play smart &amp; go for it\u00a0<\/b><\/span><\/h2>\r\n<span style=\"font-weight: 400;\">Bottomline, additional capital sources ARE available. There are many key areas you can venture into, to get the financing your business needs, but you need to be smart enough to take the right plunge. And the limited access to capital in the economy clearly makes it very difficult.\u00a0<\/span>\r\n\r\n<span style=\"font-weight: 400;\">You need to be clear about what you are seeking capital for &#8211;\u00a0 Is it for surviving or to take your business to the next level?\u00a0<\/span>\r\n\r\n<span style=\"font-weight: 400;\">Accordingly, you need to assess your risks &amp; options of scoring alternative financing &amp; place your bets.\u00a0<\/span>\r\n\r\n&nbsp;\r\n\r\n\r\n\r\n<style type=\"text\/css\">\r\n.simple-subscription-form {<br \/>  background: #f2f5f8;<br \/>  color: #222;<br \/>  padding: 1rem;<br \/>  border-radius: 0;<br \/>}<br \/>.simple-subscription-form .button {<br \/>  border-radius: 25px;<br \/>  padding: 10px 20px;<br \/>  background-color: #663399;<br \/>  color: #fefefe;<br \/>  border: none;<br \/>  font-size   : 100%;<br \/>}<br \/>.input-group-field{<br \/>  padding: 10px;<br \/>  margin: 8px;<br \/>  border: 3px;<br \/>}<br \/>input[type=email], select {<br \/>    padding: 12px 20px;<br \/>    display: inline-block;<br \/>    border-radius: 4px;<br \/>    box-sizing: border-box;<br \/>    font-size   : 100%;<br \/>}<br \/><\/style>\r\n<div class=\"simple-subscription-form\"><form>\r\n<h5>Subscribe via Email<\/h5>\r\nLiked this article? Subscribe to our monthly newsletter. We don&#8217;t spam. Promise! \ud83d\ude0a\r\n<div class=\"input-group\"><input id=\"input-email\" class=\"input-group-field\" required=\"required\" type=\"email\" placeholder=\"Email\" \/><button class=\"button\">Subscribe Now!<\/button><\/div>\r\n<div id=\"thankyoumsg\" hidden=\"\">Thank you for subscribing. \ud83d\ude0a<\/div>\r\n<\/form><script>\r\n  function sendClevertap(e) {\r\n      e.preventDefault();\r\n    var email = document.getElementById('input-email').value;\r\n    console.log(email);\r\n    console.log(clevertap.getCleverTapID())\r\n    document.getElementById('thankyoumsg').hidden = false;\r\n    clevertap.onUserLogin.push({\r\n     \"Site\": {\r\n       \"Email\": email,\r\n       \"blog subscribed\": true\r\n     }\r\n    })\r\n  } \r\n<\/script>\r\n\r\n<\/div><!-- \/wp:post-content -->","protected":false},"excerpt":{"rendered":"Scoring powerful funding has always been a curveball for businesses, but to bank that in a pandemic is&hellip;","protected":false},"author":8,"featured_media":1892,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"csco_singular_sidebar":"","csco_page_header_type":"","csco_page_load_nextpost":"","footnotes":""},"categories":[447],"tags":[],"class_list":{"0":"post-718","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-archive","8":"cs-entry"},"_links":{"self":[{"href":"https:\/\/open.money\/blog\/wp-json\/wp\/v2\/posts\/718","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/open.money\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/open.money\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/open.money\/blog\/wp-json\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"https:\/\/open.money\/blog\/wp-json\/wp\/v2\/comments?post=718"}],"version-history":[{"count":0,"href":"https:\/\/open.money\/blog\/wp-json\/wp\/v2\/posts\/718\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/open.money\/blog\/wp-json\/wp\/v2\/media\/1892"}],"wp:attachment":[{"href":"https:\/\/open.money\/blog\/wp-json\/wp\/v2\/media?parent=718"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/open.money\/blog\/wp-json\/wp\/v2\/categories?post=718"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/open.money\/blog\/wp-json\/wp\/v2\/tags?post=718"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}