2020: Year of Investments and Financing Solutions

Investments and Financing

At the turn of the decade, economists and prospective investors alike had presumed a bountiful year ahead, with opportunities blossoming and a stuttering economy finally springing back to its feet.

These speculations had driven the demand for financial instruments among consumers, who were preparing to channel their corpus toward stocks for accelerated wealth creation.

Instead, the unprecedented global crisis begot dwindling investor confidence, causing stock markets to crash almost successively across the world.

The NSE Nifty and BSE SENSEX plunged above 36% in one month, and several economists and analysts have come on record to cite the event worse than that of 1987’s economic crisis.

An overview of the Indian stock market –

  • On 23rd March, both Nifty and Sensex witnessed record-lows.
  • Nifty suffered a loss of 3934 points to end at 25,981 points.
  • Sensex plunged by 1,135 points to conclude at 7,610.

Amid rising tensions and global concerns, individuals who were preparing for investments suddenly had to stop on their tracks.

However, even with the paucity of market-linked instruments, there are avenues where individuals can cash in to mobilise their funds; one such prominent avenue being investing in a small business idea.

It requires minimum capital investment and exercising their corpus as business finance. The same would not only serve the purpose of wealth creation adequately but also would be a sustainable and substantial source of income generation in the long-run.

What are the business avenues to consider?

While, on the one hand, the current conditions have rendered multiple industries unprofitable, on the other, it has engendered business ideas that could potentially save the day for many.

Some of these business ideas that you could take up as an individual are –

  1. PPE manufacturing

PPE or Personal Protective Equipment kits are witnessing a surgical rise in demand in recent times. PPE includes an assortment of items that individuals wear to protect themselves from getting infected or being injured.

  • According to AFDLHF, monthly demand for face masks has risen from 70,000 to 1.2 million in recent times.
  • Between January and February, the market size for face masks inflated to Rs.450 crore.

Thus, PPE kit manufacturing comes forth as a most promising business venture at this juncture. You can tap into your local market demand by using business finance at your disposal to build a successful manufacturing firm.

In case your funding falls short at some point in production, you can resort to a capital finance loan to prop up your venture’s working capital standing.

  1. Essential item delivery service

Delivery services have become a cornerstone of customer convenience, which, in turn, has both improved consumption and demand for the same.

Moreover, in the current context, consumers covet a delivery service that would bring essential items like groceries, food, and medicines to their doorstep so that they do not have to step out of their homes.

This situation, therefore, presents an excellent opportunity to utilise your capital into setting up a delivery service for essential items.

The business finance required for this venture is minimal. You can either choose to lease a warehouse to stock purposes or buy as you go, depending on your capital providence.

There are several ways to set up your own trading business, and you need to choose the one that suits your needs.

  1. App and website development

If you are well conversant with how to build an online platform like a website or app, you could tap into the booming market for remote working solutions.

For instance, apps like Zoom that facilitates video conferencing for over 50 individuals have witnessed an explosive rise in demand since the turn of the decade.

  • Daily users for Zoom surged from 10 million to over 200 million.
  1. Online teaching

You could also focus on the market for online teaching services. It has garnered significant traction in recent times due to its personalised and modern approach towards teaching.

You can assemble a team of proficient teachers and set up a unified online platform for that purpose to tap into your regional market.

However, the capital requirement for this venture might be more substantial than the other ventures mentioned in this list. To that effect, you could avail a capital finance loan to meet any deficiencies that might arise in financing this venture.

What are the financing solutions to avail?

While initially, you might prefer to utilise your own corpus as business finance, later, in your venture’s developmental stages you might need to resort to other financial wherewithal for expansion purposes.

External funding allows you to strengthen the financial standing of your business while ensuring you do not deplete your resources.

Two of the most prominent means to acquire financial assistance for a small business venture are –

  1. Credit-linked Capital Subsidy Scheme

It is a government subsidy scheme endorsed by the Ministry of Micro, Small, and Medium Enterprises (MSME). The scheme was introduced to promote the competitiveness of MSMEs and encourage more and more individuals to take up the entrepreneurship role.

  1. Small business loans

You could also choose to avail a small business loan that is tailored to suit the financial requirements of small-scale businesspersons.

These capital finance loans do not require you to provide collateral. Additionally, you are independent to choose the repayment tenor for a business loan, thus ensuring convenient terms as per your affordability.

Prominent financial institutions like Bajaj Finserv also provide pre-approved offers on loans to ensure a speedy application, approval, and disbursal process.

Nevertheless, foremost, lay out a business venture plan and chart out the contingencies. Develop financial skills a seasonal business owner should possess, and finally ensure that you are equipped with sufficient resources to make the most out of your business finance.