Shiv Nanda is a financial analyst who currently lives in Bangalore (refusing to acknowledge the name change) and works with MoneyTap, India's first app-based credit-line. Shiv is a true finance geek, and his friends love that. They always rely on him for advice on their investment choices, budgeting skills, personal financial matters and when they want to get a loan. He has made it his life's mission to help and educate people on various financial topics, so email him your questions at firstname.lastname@example.org.
Finance is the bloodline of every business plan, without investment you just cannot hold the ground in this booming and ambitious digital business.
Marketing any product or service is crucial. Every single business pumps in a lot of money in its marketing. But traditional marketing can no longer reach people as digital marketing does.
With the rise in smartphones, laptops and tablets, opting for digital marketing makes more sense. It is an easy way for any business to tell its brand story and connect with its customers instantly.
If you are a digital marketing agency, the following 7 ways can help you get funding for your business.
7 Popular Ways to Get Funding
1. Venture Capitalists
Venture Capitalists, or VCs, are the most sought-after assets in the business world.
A VC will give you the required capital in exchange for a percentage of the equity share of your company. Apart from money, they also offer their guidance and expertise.
Venture Capitalists help you at every stage by constantly evaluating the business and its progress. They have a great business network and can connect you with the right people. This can help you explore lucrative business development opportunities to accelerate business growth.
VCs are interested in making quick profits. Therefore, this would be a viable option for companies beyond the startup phase.
2. Line of Credit
A line of credit, also called revolving credit, is an arranged amount of standing credit you may draw upon at any time.
You can borrow money against the repaid amount at any given time without repeatedly reapplying for loans.
The interest rates of a line of credit are higher, but it proves to be a more affordable option than a credit card. With a line of credit for businessmen, you have to pay interest on the amount you use rather than the approved total amount.
3. Bank Loans
Bank loans have been the most common funding option for entrepreneurs for a long time.
A bank generally offers two types of financing options:
- Working Capital: This loan is offered to fund a firm's entire cycle of revenue-generating operations.
- Funding: In this case, the bank evaluates the business plans of the small business. If the bank is satisfied, it will only sanction a business loan.
Check if your bank has programs that provide online loans for small businesses and firms. If you’re looking for quality banks for small businesses, check out these 14 options listed by Keeper.
4. NBFC Loans
If you cannot secure a bank loan, you can opt for a loan from NBFC.
Non-Banking Financial Corporations, or NBFCs, are institutions that offer banking services. The difference between banks and NBFCs is that they don’t get into the legal requirements as a bank does.
5. Partner Up
Starting a new company on your own can be a difficult road – mentally, physically and financially.
So, why not bring in another partner? If you have a reliable and trustworthy partner, the benefits will double. You can combine your creative and technical forces, the resources will double, and so will the funds.
Seeking trusted and strategic partnerships have propelled numerous start-ups to success.
Simply, bootstrapping means financing your digital marketing agency with your own money.
It may not be easy to attract investors or VCs in the initial stages of the business. So, self-funding will help you gain traction in the market gradually. You can either use your savings or take a loan from your friends or family.
Bootstrapping has a few advantages:
- You don’t have to give up any equity in your business.
- You don’t have to pay any interest on borrowed money
- There is no investor to share your profits with
Crowdfunding is a great way to raise money for your digital business. It helps create a buzz about your product through crowdfunding sites such as Kickstarter, Indiegogo or CrowdFunder.
You need to specify your business goals, how much money you need and what you need the money for. People on the crowdfunding platforms can make online pledges to your business either by promising to pre-buy the product or by offering donations.
You may have to give back something to those who helped you raise money. It can either be in the form of freebies or giving them early access to buy.
There are many ways to raise money for your business at any stage. You can either opt for one or a combination of these methods. Ensure whichever option you choose, you get a good funding deal for your business.
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