So, you have finally decided to break the invisible chain that has bound you to the office chair with a 9 to 5 job. Such a ground-breaking career decision needs careful consideration and a lot of courage. Leaving the comfort of a regular work environment can be challenging and it takes a lot of courage to start your small retail business.
In India, the growth potential for retail business is huge and is expected to increase in the future. Since the start-up investment is minimal in the retail business compared to other business sectors, starting a retail business is an attractive business proposition. Entrepreneurs understand the complexity of opening a retail business only when they put their feet into it.

Importance of Financing your Retail Business
The primary challenge is to overcome the obstacle of financing. The secret sauce of any successful business is that adequate funds should be available to support the innovative ideas of the founders. If you have insightful ideas for your retail business and researching different ways to fund your business, this article is for you.
When entrepreneurs apply for a business loan in financial institutions, there is more probability that your application will be rejected due to the taxing eligibility conditions of banks. Many traditional businesses fail to secure adequate funding from banks due to their past business performance.
A bank loan is not the only way for business owners to get financial help. An online business loan application can be made by considering various business finance alternatives in the retail sector.

These are the 5 methods to secure financing for small businesses:
1. Personal Loan
Finance, technology and manpower are the crucial needs of any business. Personal loans can be used to sustain the business’s growing needs and investing in infrastructure will speed up operational processes. A personal loan is a valuable business financing option that helps entrepreneurs to set up their business in a comfortable environment. Personal loans are unsecured loans, and it makes good financial sense to invest the personal loan amount to further business activity.

There is no need to put your assets at risk in securing approval for a personal loan. Moreover, the loan tenure is flexible, and the total amount can be repaid within comfortable periodical instalments.
Personal loans offer flexibility in expanding business operations. The terms of repayment of a business loan in a private institution are convenient and transparent. Business owners can select bullet payments and avoid difficulties in financial management.

Varying rates of interest are applied to personal loans depending on the loan tenure, the viability of the business model, credentials of the borrower and the financial condition of the company. The unique feature is that there are no recurring expenses, and the processing fee is normal.

2. Home Equity Loan
Borrowers can apply for a business loan in the Home Equity category by offering the equity of his or her home as collateral. The amazing thing is that even when a current loan exists against the asset, it still can be used to procure a new personal loan. A home equity loan is known as a second mortgage loan or sometimes also referred to as refinancing.

Borrowers can take additional loan amount against the borrower’s share in the joint property. A home equity loan is a multipurpose and secure loan option. Houses are valuable assets. They can be used as a strong foundation to get the necessary financing for your business.

3. Business Line of Credit
This is a form of revolving credit that is similar to a credit card. This method involves an agreement between the individual and the lending institution. Unlike a conventional business loan, the loan amount is disbursed to the borrower in phases depending on the need.

The borrower is obligated to just pay the interest on the amount that has been withdrawn and not on the total sanctioned amount. The borrower can maintain optimal credit levels by repaying the funds that have been withdrawn.

Enterprises can access immediate funds from the existing lines of credit as long as the maximum limit of the loan is not exceeded. Borrowers can make minimum payments every month to avoid the application of a higher interest rate. When entrepreneurs are applying for a business loan online, this line of credit option offers attractive features like immediate withdrawal and a flexible repayment facility.

4. Equipment Financing
An equipment loan belongs to the secured loan category and is similar to a car loan. Infrastructure financing helps businesses to achieve a financially stable position for their business.

Company owners can purchase the latest infrastructure to maintain competitive production levels and sustain the profitable running of the enterprise. The equipment that is purchased serves as collateral to the original loan. This option is the most risk-free as it involves investing the loan amount in tangible infrastructure with resale value.

5. Angel Investors
Angel investors offer extra funds to business owners to expand their business. The majority of angel investors are successful business personalities. Angel investing is done by influential people to encourage the spirit of innovation. As the name suggests, angel investors are rare to find. But once an angel investor gives you the green light, it is an amazing growth opportunity for the business.

There are fixed returns for angel investors on the original investment. The investor will pick up a percentage share of the total profits of the business. By investing in your retail business, investors own a fixed share of your business.

Bottom Line
When applying for a business loan, it’s vital to select the method that works for you. A personal or home loan may work well if you have an excellent credit history and sufficient equity in your home.
For those who are starting from scratch, setting up a fundraising platform online is a suitable option. Filing for bankruptcy can get business owners out of a sticky situation, but it will take many years to rebuild their credit reputation and be able to qualify for credit approval again.