The 5 best stages to fund the startup’s investment are as follows:

1) Seed capital

Your seed capital is frequently one of the earliest investment assets. For getting your
seed capital, you want to depend totally on personal financial savings, credit score
playing cards, crowdfunding, friends, and your own family.
Irrespective of who you get the seed capital from, just make certain you keep your
guarantees – simply define what are the tangible deliverables. Now, if you have been
clever and invested in cryptocurrency, then you could also use that in your startup
funding.

2) Funding with the help of angel buyers

You need angel buyers, and these buyers want a great, beneficial pitch. Angel buyers
are people with internet worth of at least 1 million dollars. The second round of
investment begins when you know you need extra cash to enlarge your groups,
advertising, marketing, and so on.

For the reason, that cash that can be expected to elevate at this level is better than
seed capital, and as a result, remember the fact that buyers will expect compelling
returns.

3) Financing by the venture capital

Assignment capital comes inside the third stage of this process of investment. Right
here you want the cash for expanding the advertising budget, locating new enterprise
channels, and investing in purchaser budgets.

4) Mezzanine financing & bridge loans

At this degree, your startup is developing and seeking to scale considerably with a
commercially available product. Revenue ought to be coming in regularly although the
startup isn’t always yet worthwhile. The finances raised at this point might be geared in
the direction of growth to new markets, mergers, acquisitions, or getting ready for an
ipo. Buyers at this stage want to look at a clean roadmap towards profit quickly.

5) IPO (Initial Public Offering)

This isn’t always the quit purpose for all startups. But, if you have raised cash through
every one of the preceding ranges, going public is an option to make bigger further. All
of the buyers who have traded their money for fairness till this point will ideally recoup
their investment together with additional profit. Some buyers may additionally hold their
shares, but don’t be surprised if many of them promote their inventory at the beginning
to acquire the rewards of having in early. After the IPO, inventory options for a growing
company can be leveraged to attract high expertise and the extended get entry to
capital can offer assets to push the momentum of your business ahead.

The post 5 Ways to Fund the Startups appeared first on Kea Finance.

However, according to RBI regulations, a Neobank is not a banking institution. In reality,
neither of the services mentioned pose as banks, and it is a set of financial services and apps.
Because of the absence of infrastructure, they are incapable of holding your funds. In some
sense, these Neobanks employ existing banking institutions as their capital. Your Neobank
portfolio is managed and monitored by the RBI’s approved financial institutions.

Neobanks in India

There are already 10 Neo Banks in existence in India. And there will be a few more. Neo Banks
in India have managed to raise considerable funding. In 2019, Indian Neo Banks earned more
than USD 90 million. In comparison to traditional financial institutions, neo banks in India use a
distinct and less aggressive marketing style to promote their products. The top five neobanks are:

1. Jupiter – Jitendra Gupta is one of the organization’s founders. The company was founded
in 2019 and is currently doing well. Jupiter is a well-known neobank in India. Jupiter is a
virtual financial institution that attempts to deliver financial services that are relevant to
today’s digital customers. Jitendra Gupta’s fintech business Jupiter allows users to open
accounts in a variety of nations.

2. FamPay – It is the nation’s first neobanking application built just for teens. While their
guardians are there, teenagers can access this neobank to transfer money. IDFC First
Bank’s FamCard is a secure, numberless card. FamPay enables consumers to make
prompt payments across several platforms. FamPay’s mission is to enable kids to start
monetary autonomy at an early age and to assist them in making good financial choices.
The neobank now has around two million customers.

3. InstantPay – It is the country’s biggest neobanking service. It offers a wide variety of
financial services to individuals and organizations of all kinds. According to statistics,
Neobank handles over one million transactions every day. It is most recognized for its
extensive financial services, which include cash deposits, rapid account activation,
customer care, and real-time money tracking. Customers can pay via the InstantPay site
or the InstantPay phone app. Both systems are quite easy to use and understand.

4. Razorpay – It is the first neobank that joined the Unicorn club. It was launched in 2014 by
Shashank Kumar and Harshil Mathur and has since helped 10,000 enterprises. The best
aspect would be that the current accounts include benefits such as debit cards, account
statements, and cheque books. RBL Bank is Razorpay’s bank partner.

5. Open – Open neobank assists companies in eliminating the inconveniences associated
with creating a bank account. Established Open in 2017. Open provides financial
services, transactions, and financial accounting services to startup businesses and small
enterprises. It also provides a credit card.

Conclusion

With practically every service accessible digitally, the internet youth, as well as the older
generations, are actively embracing this transformation. The banking system, which is among the
most crucial aspects of our lives, is now accessible without any need for physical bank branches,
making life much easier.

The post Top 5 Neobanks in India that you Must Know appeared first on Kea Finance.

What is MSME?

Small and Medium Enterprises (MSME) are the backbone of India’s economy. These are businesses that
have an annual turnover of less than Rs 500 crore (US$80 million). They account for 84% of all
businesses in India and employ over 60% of the workforce.

Getting a business loan is not as difficult as you might think. There are several banks that offer loans to
MSMEs. You will need to provide accurate information about your company, financial statements, and
projections for the future. You will also need to provide evidence that your business has the potential to
grow rapidly.

There are a few things to keep in mind when applying for a business loan. First, make sure you have a
solid business plan. Second, make sure your company has enough collateral to secure the loan. Third,
make sure you can repay the loan on time. fourth, always consult with a lawyer before applying for a
business loan.

Requirements to get a business loan

To get a business loan for your MSME, you will need to meet several requirements. First, you will need
to have a good credit score. Second, you will need to have a stable financial history. Third, you will need
to have adequate collateral. Finally, you will need to provide documentation of your business plan.

Each of these requirements has specific requirements that you must meet. For example, you will need
to provide documentation of your credit score and financial history if you are applying for a loan with a
bank or a traditional lending institution. You will also need to provide documentation of your business
plan if you are applying for a loan from the government or a nonprofit organization.

It is important to remember that not all business loans are the same. Some lenders may require
different types of documents than others. It is important to ask about the specific requirements of the
lender before applying for a business loan.

3 Steps to follow for getting a business loan

If you are looking to start or grow your business, you will need to find a way to finance it. There are
many different types of loans available, and you can find the right one for your business based on your
specific needs.

Step One: Assessment of Your Business

Before you can apply for a loan, you will first need to assess your business. This includes taking a look at
your financial statements, your market size, and your competition.

Step Two: Research Loans Available

Once you have determined that a loan is the best option for your business, you will need to research
available loans. You can find this information by visiting online databases or by contacting banks or
lending institutions directly.

Step Three: Apply for the Loan

Now that you have researched available loans and determined which one is best for your business, it is
time to apply. You will need to submit an application form with detailed information about your
business. Make sure to include all of the documentation required by the lender, such as financial
statements and tax returns.

Conclusion

If you are thinking of starting or expanding your business, it is important to know about the different
types of loans available and how to apply for them. This article will provide you with a step-by-step
guide on how to get a business loan for your MSME, including tips on preparing your application and
understanding the various loan terms and conditions. Don’t hesitate to reach out if you have any
questions — our team at MSME Finance could help you get started right away!

The post 3 Steps to Get a Business Loan for your MSME appeared first on Kea Finance.

Introduction

Banks offer a variety of interest rates for small business loans. The interest rate you receive can depend
on the bank and the type of loan you are applying for. Different banks have different interest rates for
different loans, so it is important to research your options before applying for a loan.

What is an MSME loan?

A MSME loan (or micro-enterprise loan) is a type of small business loan offered by banks. It is a non-
conventional loan that offers lower interest rates and longer terms than traditional loans.

There are several reasons why banks offer MSME loans with lower interest rates than other types of
loans. First, the risk to the bank is lower since an MSME is a smaller company. Second, the
creditworthiness of an MSME borrower is usually better than that of a traditional borrower. Finally,
since MSMEs are typically more nimble and adaptable than larger companies, they are less likely to
require bailouts or government support in the event of financial difficulties.

When searching for an MSME loan, it is important to compare interest rates and terms available from
different banks. This can be done through online banking or by contacting your bank directly. Be sure to
ask about any special features or benefits that may be available for MSME loans, such as deferred
payments or access to low-interest credit lines.

Interest Rates by Type of Loan

Interest rates offered by banks for a microenterprise loan can vary significantly, depending on the type
of loan.

The following are the different interest rates banks offer for an MSME loan:

1. Fixed interest rate: This is the most common interest rate offered by banks for a microenterprise
   loan. The interest rate is fixed, meaning it does not change throughout the duration of the loan.
2. Floating interest rate: Some banks offer a floating interest rate, which means that the interest rate
   changes depending on the market conditions.
3. Margin lending: In margin lending, lenders require a higher down payment (usually 10-25%) in order
   to provide financing for small businesses. This higher down payment helps to ensure that businesses
   have enough money to cover potential losses in case of an economic downturn.
4. Economic development loans: Banks often offer economic development loans to businesses in order
   to help them expand and grow their businesses. These loans can come with fixed or floating interest
   rates, and typically have longer durations than other types of loans.

What are the different interest rates banks offer?

Banks offer different interest rates for loans to small and medium-sized enterprises (MSMEs). Banks may
offer different interest rates depending on the product offered, the borrower’s credit score, and other
factors.

Here are some of the most common interest rates banks offer for an MSME loan:

–Prime Rate: This is the rate banks charge their best borrowers. It is currently around 3%.
–Variable Rate: This is the rate banks charge for loans with a variable interest rate. The rate can change
based on market conditions.
–Fixed Rate: This is the rate banks charge for loans with a fixed interest rate. The rate cannot change and
is usually higher than the Prime Rate.

Conclusion
Interest rates for a business loan can be extremely important, especially if you are looking to expand
your business. In this article, we will be discussing the different interest rates that banks offer for MSME
loans and what factors may impact them. We hope that this information will help you choose the best
bank for your needs and help you get the most favorable interest rate possible.

The post What are the different interest rates banks offer for an MSME loan? appeared first on Kea Finance.

Knowledge about the business startup prices.

The business plan

Essential to the startup effort is developing a marketing strategy—an in-depth map of the new
enterprise. A business plan forces consideration of the distinct startup costs. Underestimating
prices falsely will increase expected internet earnings, a state of affairs that doesn’t bode well for
any small enterprise proprietor.

Studies costs

Careful studies of the industry and consumer make-up need to be carried out before starting a
business. A few commercial enterprise owners pick out to hire market studies firms to aid them
with the assessment method.

Borrowing fees

Starting up any sort of business calls for an infusion of capital. There are two approaches to
acquiring capital for an enterprise: fairness financing and debt financing. Usually, equity
financing entails the issuance of inventory, but this doesn’t practice in most small corporations,
which might be proprietorships.1
For small enterprise owners, the maximum likely source of financing is debt in the shape of a
small business mortgage. Like some other mortgages, enterprise loans are followed with the help
of interest payments. Those payments need to be planned for while beginning a commercial
enterprise, as the cost of default is very high.

Coverage, license, and permit costs

Many companies are expected to put up to fitness inspections and authorizations to achieve
positive enterprise licenses and lets in. Some businesses might require simple licenses even as
others want enterprise-precise allows.
Carrying coverage to cover your personnel, clients, business property, and yourself can assist
protect your private belongings from any liabilities which can arise.

Technological cost

Technological prices consist of the fee of an internet site, data systems, and software, such as
accounting and point of sale software, for an enterprise. Some small commercial enterprise
proprietors pick to outsource those capabilities to different organizations to save on payroll and
advantages.

Gadget and supplies

Every business calls for a few shapes of equipment and basic elements. Earlier than adding
equipment expenses to the list of startup charges, a selection must be made to rent or buy.
The state of your finances will play a main element in this selection. Even when you have
enough cash to buy equipment, unavoidable charges may make leasing, to shop for at a later
date, a viable alternative.

Marketing and promotion

A new agency or startup commercial enterprise is not going to succeed without promoting itself.
But, selling a business includes a lot more than putting commercials in a local newspaper.
It is usually marketing—the whole thing a company does to attract customers to the commercial
enterprise. Advertising has come to be this type of science that any advantage is beneficial, so
external dedicated advertising groups are most usually employed.

Worker expenses

Businesses making plans to lease employees ought to plan for wages, salaries, and advantages,
also known as the cost of labor.

The post What Are the Basic Expenses to Create a Start-Up? appeared first on Kea Finance.

TOP TECHNOLOGIES UPGRADATION SOLUTIONS FOR MSME

1) Sensors for plant machinery.
2) 3D Printer
3) IIoT (industrial internet of things)
4) AR (augmented reality)
5) VR (Virtual reality)
6) AI (artificial intelligence)
8) Cloud computing
9) Big data analytics

ROLE OF ONLINE TECHNOLOGIES IN MSME?

New-age technologies are also spurring new business models in MSME(Micro, Small, and Medium
Enterprise), such as the following: Brego-provides real-time insights from a firm’s financial data;
LendenClub-connects lenders and verified borrowers through its platforms, and Meesho- enables small
businesses to sell products online through social media channels.

TOP DIGITAL TOOLS USED BY MSME:

E-COMMERCE WEBSITE– earlier, e-commerce was used to manage end-to-end operations at minimal
expenses on behalf of the seller. This option has become less attractive for sellers with eroding incentives
since they take the lion’s share in profits through service fees and logistic charges. Now, several website
builders such as Shopify, Kartrocket, and Woocommerce can help you set up your e-commerce platform
through a DIY approach. You need to make a few clicks and drags, add product information and relevant
pictures, and you’re good to go.

SECURE PAYMENTS– security is one of the critical and most important components in the digital
world. Cyber attackers hunt for the smallest loopholes in the digital infrastructure and how they can
exploit their customers. So MSME has adequate security measures and secured payment gateways to
avoid any situations like this.

SUPPLY CHAIN MANAGEMENT– MSME has also worked on the supply chain for effective online
operations. This particular tool also provides employment in transportation, courier, warehouses,
factories, etc.

How does the performance of technology help in the survival of MSME?

Companies must accept the digital transformation and shift their business online.

Digital transformation requires some investments. Where small businesses face challenges with liquidity
crunch, lending institutions like banks, whereas adapting technology by other stakeholders can make a
huge difference and help receive capital without waiting.

By digitizing the entire process with the help of technology, financial institutions can reduce loan
applications. Therefore, innovative technology can help automate risk for small businesses, which will
speed up the lending process.

CONCLUSION

The MSME industry forms the backbone of our world economy by giving rise to employment for over
100 million people and contributing to India’s GDP of about 29%, which is assured of reaching 50% by 2025. Digital transformation and policy reforms enable MSMEs to recover from the economic crises and
help them succeed by becoming more resilient and efficient. Thus technology offers a huge opportunity to drive MSME survival and growth in small businesses. Now is the best time to use technology to make our economy truly self-assured. With the help of technology, MSME will progress more with rapid speed and will be able to do way better than its already doing.

The post Top Technological Solutions were Shaping India’s Msme Landscape appeared first on Kea Finance.

Account Aggregator

For a few years, the Account Aggregator technology has been on the market. However, the Account
Aggregator system will be built by more than three businesses with the operational license. One Money,
CAMS Finserv, and Finvu are the companies in question; COVID has postponed the introduction of their
platforms until 2020. Early 2021 is only a guess based on the lack of knowledge about the debut of these
AA platforms.
Customers will be able to consent to their data being shared digitally through Account Aggregators,
enabling for seamless Open Banking. To transmit or receive data safely and digitally, the BFSI industry is
expected to rely fully on Account Aggregator services that are compatible with legislation built around
Consumer Data Protection.

The Open Credit Enablement Network (OCEN)- A non-profit organization

The Open Credit Enablement Network is a new era of financial inclusion that will liberate the country’s
credit-starved population (OCEN). The old credit paradigm has failed to offer credit to the citizens in
India who most needed it. To introduce large-scale development as well as integrating abilities into
lending platforms, this public process of selecting a logical will work closely with Account Aggregators. It
promises to deliver loans to borrowers quickly using technology-driven Open APIs that will connect the
borrower to a network of lenders rather than just one. To better service new customers, OCEN systems
prioritize use of technologies to decrease gaps in document gathering and digital loan distribution.
Individuals and MSMEs will benefit from open banking capabilities thanks to a standardized set of APIs
that may easily integrate lending abilities into their existing products and services, according to OCEN.
The Open lending model, or OCEN, has the effect of providing an uniform language for lenders to
expand and develop novel financial loan products. With the simplicity of systemized financing, there is a
larger probability of competitive pressures in the lending area, with customers in need of loans receiving
loans at attractive interest rates.
OCEN’s future will be bright, with large-scale global businesses entering the Indian lending market.
OCEN will guarantee that lending associates are a regulatory-compliant framework that will bring new
investments, innovation, and consumer centricity to the market. This would close the credit hole in the
market, allowing clients to better their lifestyle and business capacities.

Architecture for Data Empowerment and Protection

The Data Empowerment and Protection Architecture (DEPA) gives every Indian citizen control over their
personal data. DEPA uses standardized technological architecture to provide democracy to the customer
data space and service providers. DEPA enables a data-sharing platform that is secure, interoperable,
and respects privacy. Consent artifacts, an open API, and a norm for financial information are used to
share data. To enable adoption of standards for data storage and processing procedures, the Consent
Artefact will be founded on the ORGANS principle (Open, Revocable, Granular, Auditable, give Notice,
and maintain Security by Design).

In the modern era, DEPA’s data governance concept Customers will have total control of the data thanks
to the open banking system.

The post Top Open Banking Initiatives in India 2020 appeared first on Kea Finance.

Start-up-fit mentorship

A startup and a mentor both need to be compatible with the market, just like a product does. Before
making any commitments, it is essential to comprehend the creator, the mindset, the business
model, and the product. You are not qualified to mentor every firm even if you have mentored
several businesses in the past. Therefore, before committing, make sure you: I Understand the
founder’s expectations
ii) Clearly defined the areas in which you may offer assistance and expertise
iii) If there is any prospect of payment, such as fees or equity

Ultraviolet: The best policy is to be honest.

As a mentor, the founders value your advise, which is frequently included into the future strategy.
Please be honest and direct while speaking, and don’t sugarcoat anything.
Since you are not supposed to be an expert in everything, it is better to be honest than to give bad
advise. You’re free to say “I don’t know.” If you can put them in touch with someone who can assist
them where you cannot, that is always welcomed.

Be attentive

Despite how much we like to talk, it is vital to pay attention to what your trainees have to say. It’s
crucial to have two-way communication and pay close attention to the ideas and proposals a
founder presents if you want to see something remarkable emerge.
In order to provide the best answer, you must first understand the issue at hand. As a mentor, a
founder may occasionally just want to express their issues and concerns. You don’t have to be in
problem-solving or advice mode all the time.

Excellent things require time

It’s possible that entrepreneurs won’t see significant changes right away once you start coaching
them. To see the plan through to completion will require a lot of time, patience, and confidence.
Make sure the entrepreneurs understand this and are on the same page regarding the deadlines.
Since miracles don’t happen overnight but can be accomplished with patience and a lot of devotion,
it is crucial to meet frequently and keep talking in order to accomplish the shared goals.
Sometimes Ctrl C+Ctrl V doesn’t work.

You can have created or worked at numerous organizations, or you might mentor various firms. You
are exposed to a range of situations and results as a result. Results at one startup may not
necessarily translate to the other. Ask the entrepreneur to contextualize your experiences and best
practices for startups after you have shared your own experiences and those of others.
Every company is different, thus it can require an entirely new approach. In order to ensure that the
answer you are offering is specific to each and every person, you must be in full-on drive mode.

The post Things to remember when mentoring startups appeared first on Kea Finance.

Some of the benefits of invoice discounting are listed below:

Cash availability- This sort of financing allows you to get money within 72 hours after applying. It is advantageous for companies who generate high-value invoices. A single delinquent invoice ties up a large sum of money.

Protection against bad debts- A few financial institutions charge a premium for support facilities that give protection against bad debts. If you’re worried about losing your customers’ trust, you can use a secret invoice discounting service.

Higher funds- As a company expands, it becomes increasingly eligible to receive larger amounts of money related to trade receivables. It offers a remedy for late payments. The monies produced can be used to help with business working capital and provide needed capital.

The optimal prescription for Invoice Discounting to take off in a big way is accelerated digital adoption, a fully digitized distribution network, significant e-invoicing adoption, advancements in automation and self-service capabilities, and connection with Enterprise Resource Planning (ERP) systems. India’s digitization activities have resulted in the formation of an infrastructure that is favorable to the development of dynamic discounting platforms. This is done on a sliding basis based on days paid in advance. That is, instead of a fixed discount that does not take into consideration the quantity of payable days lowered, technology enables variable discounts to be granted depending on payable days that are decreased on the invoicing payment date.

For the victory, Invoice Discounting:

We’ve seen how invoice discounting is a better and more flexible option than traditional discounting. Large businesses can put their extra cash to productive use as well as earn 2-5 times more on their reserve cash. This will increase their EBITDA profits. For suppliers, it gives quick visibility into receivables, prompt cash infusions, collateral-free funding at low cost, and hence assists them in continuing their operations. Banks and other financial institutions will then be able to expand their supply chain credit penetration in a cost-effective and low-default mechanism (and high risk adjusted yield).

The post In banking, What is Invoice Discounting? appeared first on Kea Finance.

As a result of the growing volume of data as well as the speed with which it is consumed through Open Banking, new vulnerabilities develop. Non-banking ecosystem partners will not necessarily share the very same level of concern for client data as regulated banks. They will be blind to the hidden costs of compliance, risk, and security standards that are required to preserve data and, more broadly, the validity of Open Financial transactions. So, how can a company take proactive efforts to avoid hazards that don’t even exist yet? Open Banking must be viewed as a “system” with major components such as participants, technologies, operations, and data that are continually growing and inherently risky.

Risk for the Player

Fintech companies, digital financial institutions, data integrators, credit bureaus, payment networks, and third-party providers are all part of the Open Banking ecosystem,  Companies from the telecommunications, healthcare, and retail industries have also jumped on board. The instant data is exchanged, there is a risk. Noncompliance with conventional privacy measures, industry-specific legislation governing healthcare data, and the unintentional use of consumer data are all harmful practices. Ecosystem services be disrupted momentarily or permanently as a result of partner additions or exits, prompting one to consider ecosystems as an offshoot of a typical company. Furthermore, there are regulatory and reputational risks, including the risk of failing to establish good legal agreements on sharing data among partners and the reputation hazard of poor partner selection.

Now we’ll look at Process Risk. The complexity of services raises the risk of the process. There are several risks in the most basic purchase or sale a customer, a bank, and a third party (shown below), including TPP misusing customer data, a lack of process steps controls, fraudulent TPP access, absence of track and trace of customer data use, risk of responsibility by all parties, and data security across devices. Transactions may remain “open status” for several days for complicated lifestyles events, such as a client business trip involving services from multiple suppliers, requiring large number of data transmittals as well as scores of algorithms designed to support.

Data Security Threats Aside from security concerns, what happens when data from many businesses — such as retail, healthcare, and others – is combined must be considered. Will HIPAA, ECOA, and the rest of the alphabet of industry-specific rules be applicable? And when is it appropriate to do so during a client interaction? Will a primary bank’s document preservation policies extend to all ecosystem players? Which party should be responsible for credit losses caused by inaccurate credit data utilized in an offering? These are extraordinary new issues arising from data, which, unfortunately, is the same data that allows Open Banking to exist.

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