When you are forced to turn to external funding to meet your current financial needs, you would probably try to identify the various ways in which you could secure instant funds. There are banks, NBFCs – otherwise known as Non-Banking Finance Companies, private lenders, angel investors etc. If you are a start-up looking for funding, there are other kinds of lending organizations as well. In this scenario, it is important to understand the role of an aggregator or platform. Basically, a business loan financing platform brings together lenders and borrowers; it facilitates smooth transactions between these two key stakeholders, taking a small fee for this service that it renders.
Understanding The Role Of An HNI
In a situation where money is scarce and there is not much cash flow, there are individuals who come forward to help. These are usually people who have had the good the good fortune of making some money that they have now kept aside for investment purposes. A High Net Worth Individual or HNI is usually a person who has been able to put away a sizeable amount of money that he or she now uses in the market as an investor. These could be individuals who have earned an exceedingly high salary over a long period or people who have profited from a business earlier. These HNIs do not take the trouble of doing a background check on a borrower; instead, they align with lending platforms so that their money is placed in reliable hands.
Start-Up Facilitators
A lending platform could have a scheme that supports only start-ups and does not have working capital support. This is a choice made by the platform, depending on their vision and scheme of operations. This is actually quite helpful for those who are looking for seed money to start either a new business or diversify into some other operation. Instead of going to a regular bank, they approach a lending platform that is best suited to their requirements, putting forth a business plan with clear deliverables and timelines. Once this is done, the experts on the platform go through the proposal and try to understand the pluses and minuses of the plan submitted. Once they are satisfied, they do a complete check on the viability of the business that is proposed and then proceed with the funding process.
Funding a business is certainly a complicated process; it is important that you go to the right kind of platform if you need to get your funding in time.