• For a small capital that goes a long way

The stock markets have been working for them and entrepreneurs are looking at more money in the pipeline. With the kind of money they need being raised through IPOs and mergers IT start-ups are riding high on this wave of success. This does not make the ordeal of raising money for a ‘low-tech’ enterprise any easier. Ask any entrepreneur with a fairly good sales record and a healthy balance sheet. The answer you may get can be quite disillusioning- it is close to impossible to raise money for a new venture or an even an expansion.

Investors are looking for bigger returns in the high tech arena, and are investing in millions. Can smaller low-tech companies get a few crumbs off the table?

• Banks
Banks prefer lending a helping hand to established firms that are keen on being more successful. Small entrepreneurs may be sidelined in the process, especially if they represent a low-tech concern. If you have an exceptionally good track record you can give it a try.

• Strategic Alliances
This could be a tie-up with a larger company, and would mean an increase in business through the alliance. The larger company would also benefit in a way as it would give them an entry or even a foothold in the local market.

• Venture Capitalists
They furnish the capital and in return get a stake in the enterprise. This however is very popular in the IT circles. Many dotcoms have been surviving as a result of VC funding. However this may not be very bright for small non-IT enterprises because of the quantum of money they seek.

• Non-Banking Financial Companies
NBFCs come to the aid of entrepreneurs who fail to get into the good graces of Banks and other investors. They capitalise on the assumption the supporting smaller enterprises involves lower risks and secures higher profits. They stand by entrepreneurs for long periods providing non-financial assistance in addition to monetary aid. By and large the interest rates they charge are also considerably lower than Bank rates- a good example is Sundaram Finance an NBFC in Tamil Nadu that has helped transporters by providing loans to purchase trucks and buses.

• Credit Cards
47% of small businesses in the United States use credit cards to raise capital. This idea hasn’t yet caught on in a big way in India but there shouldn’t be any reason why it should not become a popular route to raise capital. The only disadvantage for small enterprises would be the high interest rates working against them.

• Friends and Family
Many whopping success stories find their roots in loans and funding from family and friends, this may not prove to be as difficult as the rest since you will not be required to prove your credentials etc. The entrepreneur can choose from these options based on his track record and growth strategies and game plan he has in mind for the company.