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Funding Agencies in India

Funding Agencies in India

Funds and business go hand in hand. The business environment of India is constantly improving and so is the need for funding that is not only required by business organizations but also by NGOs.

For business, fundraising is one of the most essential activities as without it any business cannot survive. Availability of the required funds is very important to start and to grow a business, through this funding; there are various developments that take place.

There are many functions that take place in a business and to run the operations smoothly, funding is very much required. Lack of funding can be the biggest reason for the business to fail and for the long term running of the business, it is vital to ensure that the required funds are there at all times.

Every business activity requires funds such as increasing team size, new projects, new sales drive, and product promotions. For different types of business, there are different funding options that suit the business type.

There are many organizations in India that are on the lookout for funding for their projects and business but they are unable to find but there are various ways and funding agencies through which they can get the funds for the business.

Startups are majorly on the lookout for capital funding for their businesses but they also the debts that come with the capital funding that they will be receiving. It is very important to understand the nitty-gritty of funding and funding agencies in India to get the right pick for business.

There are many business investors that want to invest in different businesses and projects if they see potential in them. Foreign investors and venture capitalists have been investing in companies in India. It becomes very difficult for the entrepreneurs to raise capital and therefore a thorough knowledge about the funding agencies in India is essential to get funding.

The different types of funding that are present in the market are:

Equity Financing:  

  • In equity financing, there is no requirement of paying back the funds that are invested by the investor in the company.
  • There is no risk for the business as the amount that they will be receiving would be debt-free as they do not have to give back the money and the major risk is for the investor in regard to equity financing.
  • Investors can put pressure on the company for the achievement of the growth targets as they have invested their trust and money into the company.
  • The top sources for equity financing are the Angel Investors, Family and Friends, Venture Capitalists, Crowd Funding, and Incubators.

Debt Financing:

  • In Debt Financing, the major risk is on the company that takes the investments as it is required to be paid back to the investors in time which is decided between the investor and the company in which the investor is investing money.
  • It is extremely important for the company to pay back in time and with interest. The investor gets the collateral against the investment that they put in business.
  • In terms of involvement in the companies decision-making process then there is no involvement of the investors in this case. The sources of Debt Financing are Banks, Non-Banking Financial Institutions, Government Loan Schemes, Mudra Loan, and Standup India.


  • There are various sources of grants such as the Central Government, State Governments, Corporate Challenges, and Grant Programs of Private Entities.
  • The best thing about grants is that the company does not have to pay back the investments and there is no risk factor.
  • Grants are given to startups and businesses in the form of monetary support for a specified purpose. Also, the grant issuing authority has any say in the decision making of the company.


  • Incubators are the organizations that provide investments to companies and also deal in activities that assist in the operation of the business such as office spaces, utilities, and legal assistance.
  • These types of organizations have a goal of helping the various organizations in starting their company.

Government Loan Schemes:

  • The government time and again releases government loan schemes in order to help the business and to make them prosper.
  • These schemes provide collateral-free debt to the companies who are on the lookout for capital investments.
  • Few of the prominent schemes of government are CGTMSE, MUDRA, and Stand-up India.

Angel Investors:

  • The examples of Angle Investors include Indian Angel Network, Mumbai Angels, Lead Angels, Chennai Angels, etc.
  • These are the individuals that are willing to invest their funds in the high performing and high potential companies/startups for equity.

Crowd Funding:

  • Crowd funding is gaining much importance in today’s time and in this type of funding the capital or money required for business activities is raised from the crowd that is willing to make their contributions.
  • For this type of funding, there are various online platforms through which the money is raised for a particular project.

Venture Capital Funds:

  • The Venture Capital Funds are the investments that are done in the high growth companies/startups as they have their own preference of sector, companies, and amount of funds.
  • In return for their investments they want the equity and also have a major stake in the decision-making process of the company.


  • The financial institutions such as the Banks/NBFCs provide debt funds to the companies for their capital investments or project investment.
  • There are various factors that are taken into consideration before the grant of the loan to the company and the ability of the company to pay back the loan to the bank is also taken into consideration before giving the loan.

Venture Debt Funds:

  • These are the private investment funds that give the investment amount to the business in the form of debt investments with a rate of interest that has to be paid back to the investor in the stipulated time.
  • The given above are the various modes through which investments can be raised for the organization. For further information on raising capital or investments for the company, contact FDI India as they are the experts in this field.

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