4 Organizations That Help In Startup Loans

It is the greatest impulse of every individual to come across or come up with the idea that can translate into a successful business/startup at some point. But it is common knowledge that even if your idea is groundbreaking, there are several hurdles in place that hinder it from taking off from the ground level.

Investment in your company.

The most potent of the threats is the matter of investment in your company. Several firms have stultified due to a lack of funding and direction, thus wasting years of work and development. So you must be able to find sustainable and feasible solutions for this problem with your startup. Fortunately, some measures reward ideas, mainly helping budding companies get off the much-dreaded ground level. 

Companies that provide startup loans are the answer.

Business or startup loans’ companies are the answer to every finance-related need, and these business or startup loans’ providers help your company achieve results and start strong. Startup loans’ companies cover various expenses such as purchasing equipment, inventory or real estate hence helping small companies overcome this substantial initial investment.

Now let us look at companies that can help you navigate through the initial development phase with monetary input or startup loans.

1. Government-led Or Funded

The government provides several schemes that aid startups in getting into the first phase of development. Funding from the government may be subject to higher security checks and other processes to ensure your startup aligns with government regulations.

However, a positive is that these loans are at very low-interest rates, thus not majorly siphoning off from your revenue and organically allowing your business to scale.

There are more than 39,000 startups that have benefitted from these startup loans. However, government funding cannot be approved for projects and firms in the initial stages of development. These challenges prompted the government to consider and develop schemes for Micro, Small, and Medium Enterprises (MSMEs) to help these startups.

This also includes the Small Industries Development Bank of India (SIDBI) that directly lends to these firms at very low interest. 

Some other government-led or funded organizations or schemes included –

• Bank Credit Facilitation Scheme – The National Small Industries Corporation heads it, and it was formed to meet the credit needs of MSMEs.
• Pradhan Mantri Mudhra Yojana – Launched relatively later in 2015, supervised this scheme by the Micro Units Development and refinance Authority (MUDRA). Small business owners can avail of this scheme and the MUDRA loan to kick start their business.
• Standup India- Launched in 2016 and headed by the SIDBI.

2. Startup Loans From Banks

Banks offer loans at reasonable interest rates and provide added benefits on top of financial assistance. Here are some banks and their interest rates.

• HDFC Bank- 15.75% p.a. onwards
• TATA capital- 19% onwards
• Fullerton India- 17% p.a. to 21% p.a.

3. Equipment Finance

Business/startup loans’ companies that offer equipment finance provide loans when you pledge your company equipment. This sort of finance and loans work with already existing assets you have bought for your company. The lending rates will also be more manageable if the equipment is already pledged, and if you default with your payments, they have the right to seize your equipment to cover their investment. 

Equipment leasing is another method that helps you recoup some money you invested initially. 

4. Micro Lenders

Microlenders are often Non-Profit Organizations that help small businesses obtain small amounts to finance their businesses. Since these business/startup loans’ providers are NGOs, it does not require massive collateral. Some options are

• Accion is flexible on credit requirements and provides professional assistance regarding investment.
• Kiva is a crowd driven platform that works on crowdfunding. These loans carry a 0% APR, which helps small businesses get the crucial initial investment at a very reasonable rate.