Effective Ways to Fund your Business in 2021

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How to Fund your Business? 

Let’s face it, the primary issue which every entrepreneur is facing today is just one word, Capital, or the funds. Your business plan is easy to formulate, the professional services required are easy to hire but what about the capital? How should you raise funds which are required to start and keep your business going in the long run? Let’s have a look at some of the effective ways to fund your business. 

Your Funds 

Yes, you read it right. The primary source of a fund should be your own. Of course, you wouldn’t have planned a start-up without some savings or some capital of your own. Why are self-funds so important? The foremost reason is that you don’t have to worry about returning those funds, as they are your own. Second, it is more advisable to rely on your funds, rather than going for loans and having a huge debt on your head for years. However, you should avoid doing major funding on your own, as long as the funding is minimal, you can rely on your funds. 

How to Fund your Business in 2021
Tree growing on coins stack with sunray for saving money concept


One of the major sources of funding is through investors. Here, we have various options and their types that can aid you in your business. Some of them could be, Angel investors and Venture capitalists. Who are Angel investors? Angel investors are individuals who back young and new start-ups, especially at times when nobody is ready to back them up. This type of investor is recommended, as for Venture capitalists, they would invest in high potential start-ups only or a start-up that has a good vision and would ask for some position in the company as an equity holder or so. 


  One of the modern methods of sourcing is crowdfunding. In crowdfunding, you display a detailed view of your business in front of people, through a particular platform, and in case it attracts the investors and a large number of people, they give an online pledge to buy your product in the future or loan/donate you the money. In crowdfunding, rather than receiving funds from one individual, you receive it from the masses. This is a very efficient way to gain the likes of the masses for your business, as it would also create hype for your business and your product. However, one thing to note is that you need a very unique and strong business plan to win the masses on your side. There are various sites that you can use as a platform for crowdfunding. 


Normally, we all hate this word, ‘loan’, but it is an important element or a source to fund your business. Loans could be from banks, which would require you to meet many of their requirements and also some interest rate, many entrepreneurs fear this option and only opt for it when necessary. There are some instances, where you do not qualify as per their requirements, in such cases you can also opt for loans through Non-banking finance Corporations or small finance providers. This does not require you to meet the formalities and legal requirements on par with banks, rather it is easier to acquire funds through such options. 

Contests and Government Funding 

There has been an increasing number of contests and competition for new start-ups and young entrepreneurs out there. Winning such contests can help you acquire major funds which can aid you in your start-ups, this can also help you gain popularity, hence, it is never any harm to participate in such contests, even if you lose. Next up are, government funding. The Government of India has introduced many programs for new and young start-ups. Honorable Prime minister, Narendra Modi also supports the idea of new entrepreneurs in India and accordingly, there are various programs that emerged on the same. 

Friends and Family 

Now, this idea might sound unprofessional and maybe even a little unrealistic for you. However, instead of convincing investors or banks for funds, it is better to approach your family and friends who would support you and believe in your start-up, the trust factor is already built here, which gives you a major advantage to gain funds. 

We can conclude here that there are various ways through which we can acquire funds for our business, some of them require exposure, some require convincing, and so on. Each, have their pros and cons yet, we can opt for the best method suitable according to our circumstances and goals. 

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