A Fresh Look At Small Business Financing

The holiday season’s upon us and with it often comes extra stress, rushing around, and a sense of feeling overwhelmed. But as the new year approaches, it can also be a time for creating fresh starts. When it comes to your livelihood, finding a way to finance your small business can also be overwhelming at best, and sometimes downright daunting. However, just like you may be getting ready for the new year on a personal level, now is also a great time to get the ball rolling on funding your new venture. With that comes staying on top of all the options, trends, and resources surrounding small business financing.

How Much Does It Take?

Before determining how to go about financing your business, it’s important to have a concept of how much capital it takes to start a business, as that can impact where you choose to seek finance. One survey done by the Wells Fargo Small Business Index reported that $10,000 is the average amount of startup money required by a small business owner. However, other surveys, such as the Kauffman Firm Survey, indicate that the number is much higher – closer to $80,000.

While these numbers help to give insight into what to expect, the amount of capital needed to start up will vary greatly depending on the type of business, industry, size, etc. The Small Business Administration (SBA) recommends a few simple tips to help calculate your start-up costs. Once you’ve analysed your potential expenses and capital expenditures, assessed your assets, and allocated your costs, you’ll be able to calculate your startup cost using this starting costs estimate calculator, offered by entrepreneur.com.

Small Business Financing Options

There are many options available for small business owners to explore, from traditional to slightly out-of-the-box:

  • Bootstrapping

    Even though funding your small business out of pocket – or bootstrapping – may potentially be the most challenging financing route, it doesn’t mean that a significant portion of U.S. entrepreneurs doesn’t explore this option. In a recent study by BlueVine, results show that 75{ed162fdde9fdc472551df9f31f04601345edf7e4eff6ea93114402690d8fa616} of American small businesses rely on personal finances as their primary source of small business funding and 83{ed162fdde9fdc472551df9f31f04601345edf7e4eff6ea93114402690d8fa616} have put at least some of their money into their companies

  • Alternative Lending

    If financing your business with your money isn’t an option, you’ll need to plan on borrowing the money, and there are a variety of ways to obtain a small business loan. Emerging over the last several years are alternative lending companies that can offer quicker and smaller loans through a simple online application process.

  • Traditional Bank Loans

    Although big banks are known for a high rejection rate and an extensive application process, bank loans remain a viable option for small business lending – and approval rates are up, as we’ll take a look at it below.

  • Raising Capital

    Venture capitalists and angel investors can be a successful path to take for the right kind of business. However, keep in mind that it will require a very well thought out business plan, strong financial projections, and a lot of passion for your business.

  • Crowdfunding

    A newer form of financing a small business, crowdfunding offers a method of raising money without having to pitch to a team of investors. And while there are certainly success stories out there, crowdfunding has yet to become the go-to option for businesses. According to a survey done by Manta in March 2015, only around 2 percent of business owners surveyed expressed that they had ever used a crowdfunding platform.  However, it could be worth looking into if other avenues have been exhausted.

Approval Rates

According to Biz2Credit’s recent Small Business Lending Index report, approval rates at banks and institutional lenders recently reached all-time highs with the approval rate for small business loans from big banks at 23.5{ed162fdde9fdc472551df9f31f04601345edf7e4eff6ea93114402690d8fa616} in October (up from 23.4{ed162fdde9fdc472551df9f31f04601345edf7e4eff6ea93114402690d8fa616} in September). Institutional lender approval rates also rose to a new high of 63.1{ed162fdde9fdc472551df9f31f04601345edf7e4eff6ea93114402690d8fa616} in October. For small banks, the approval rates have remained stagnant, at 48.7{ed162fdde9fdc472551df9f31f04601345edf7e4eff6ea93114402690d8fa616}, and alternative lender loan approval rates declined to 59.5{ed162fdde9fdc472551df9f31f04601345edf7e4eff6ea93114402690d8fa616}.

For SBA loans (specifically the most popular type, the SBA 7(a) loan) the approval rates are relatively low and require stellar credit. In a report by the SBA, approval rates from 2015 were broken down by gender, ethnicity, and location. For minority-owned businesses, the approval rate was 29{ed162fdde9fdc472551df9f31f04601345edf7e4eff6ea93114402690d8fa616} versus 57{ed162fdde9fdc472551df9f31f04601345edf7e4eff6ea93114402690d8fa616} for white-owned businesses, 71{ed162fdde9fdc472551df9f31f04601345edf7e4eff6ea93114402690d8fa616} for male-owned businesses as opposed to 29{ed162fdde9fdc472551df9f31f04601345edf7e4eff6ea93114402690d8fa616} for female-owned, 67{ed162fdde9fdc472551df9f31f04601345edf7e4eff6ea93114402690d8fa616} existing businesses versus 33{ed162fdde9fdc472551df9f31f04601345edf7e4eff6ea93114402690d8fa616} new businesses, and 17{ed162fdde9fdc472551df9f31f04601345edf7e4eff6ea93114402690d8fa616} rural versus 83{ed162fdde9fdc472551df9f31f04601345edf7e4eff6ea93114402690d8fa616} urban.

While there are many aspects of starting a business that will undoubtedly overwhelm you, don’t let securing small business financing be one of them. Armed with the knowledge to get started, use the upcoming season as the perfect excuse to get the ball rolling on funding your business.

Primary Keyword: small business financing

Variants: financing for your small business, small business finance options,  securing small business financing, surrounding small business financing

Antonyms/Synonyms: small business loan, small business loans, small business lending, business lending options, Crowdfunding, traditional bank loans,  alternative lender loan









So Your Small Business Financing Went Through, Now What?

Small Business Financing Can’t Be the End Goal

For Small businesses, especially new small businesses, or those who are looking to expand their reach, financing options are one of the most important things to worry about. But what happens after you have received your funding? What do you do with your small business financing? This is the fun part of having a small business, but it is also a significant time as well. Small businesses care much about how they handle their financing.

Updating Strategies

Many small businesses will open, and have the perfect strategy for their customer base, bringing in clients and managing cash flow to create profits. However, many companies (see graph below) cannot keep up with the changing needs of their industry, or adapt to the new consumer habits. No strategy is going to last forever, and with technology, strategies must continually evolve.


Financing for customers with a small business must be kept abreast of the ways that consumers are changing their habits. Small business finances, or at least part of them, must be used to improve the business strategies you use to run your business, from the top down.

Keeping Good Employees with Good Wages

Financing a small business also means funding the employees that you hire to help you with the firm. It is common sense that you need to have the best employees working for you if you want to have a successful business. The biggest problem with this is paying them real wages. On the one hand, you need to be able to have profits, so that you can grow your business, and continue financing for small firms. On the contrary, you have to pay them enough to keep them. To attract the best employees, and have the best chance at success, you need to pay your employees well.


One of the most important factors in how to finance a small business is to figure out how to market your business. Similarly, for business strategies, you cannot use the same marketing strategy. You must look at your customer base, and identify the best strategy to reach them, as well as new clients. You cannot wait until your marketing strategy has worn out and you begin to lose customers; you must use the best small business financing to give you the funds you need to identify new marketing strategies.


One of the biggest causes of failure for small businesses is that they outspend their little business financing. Whether because small businesses are taking a risk hoping that profits are going to come, or because small businesses have no other option to keep themselves open, overspending is a massive problem. Financing for customers of a small business must revolve around keeping spending in the small business setting to a minimum, and only for costs that the firm absolutely has to make. You cannot spend just because you recently received additional financing. 

Growing the Business

Small business growth is the overall goal of small business financing. You want to get the money that you need to expand your business, so that it remains within your means, but that it is sufficient to reach more people and achieve more profits. Consumer financing for small businesses can help you with this, but it is up to small businesses themselves to use that money intelligently and always with growth in mind. Business cannot grow too fast, beyond what they are capable of running, but they cannot stifle themselves by being afraid of growth. In the end, you must know yourself, and know your business, because nobody else can know the details like you.  


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Tips and trends for small business financing

With around 543,000 small businesses starting up in the USA every month, it has never been more important for the owners to get their small business financing correct from the outset. With almost 28 million small businesses in total in the USA, it’s a thriving market out there.

A small business is defined as an organisation with only five workers or less, and reports show that more than 50{ed162fdde9fdc472551df9f31f04601345edf7e4eff6ea93114402690d8fa616} of working Americans are currently employed within small businesses.

Small business financing

But just having a creative idea and a business plan is not enough – entrepreneurs will inevitably need funding to get their small business, however, small it may be, off the ground and running successfully. So what should they be prepared for?

  1. Beware of unscrupulous online lenders

Online lenders are drawing in entrepreneurs with their small business financing, offering quick approval processes and money in the bank. However, it’s important to read the small print as sometimes their terms and conditions can be unclear. On the positive side, online companies are putting the pressure on traditional banks and encouraging them to support small businesses. They can also help entrepreneurs’ businesses to get off the ground.

  1. Don’t rule out banks for small business loans

Smaller business loans had been very hard to come by recently with 79 percent of small business loans still coming in at more than $350,000 and to be eligible businesses had to have a minimum of a two-year financial history. However, partly due to the threat from the online lenders, banks are now moving towards providing lower value loans and helping to find small business funding options.

  1. Don’t ignore the baby boomers

A quarter of all entrepreneurs is between 55 and 64 – the baby boomers. These small business owners are often able to support their small businesses by using up retirement funds and savings. The Rollover as Business Startup (ROBS) strategy can fund their small business completely, or it can work alongside a loan. It has become extremely popular as an alternative option for this particular group of small business owners.

Does small business funding add up?

So with those three tips in mind, what is the likelihood of actually securing small business support and what kind of successes have other entrepreneurs experienced up to now. Let’s have a look at whether the numbers do add up.

Firstly, let’s look at the positive and vital contribution which successful small businesses make to the economy. Since the early 1990s, small businesses have been responsible for creating more than 65{ed162fdde9fdc472551df9f31f04601345edf7e4eff6ea93114402690d8fa616} of all new jobs.

This time last year, small businesses – by definition that is an organisation earning less than $5 million revenue – were enjoying a 7.8 per cent growth in their sales, which is an increase again from the year before.

Secondly, another report highlighted that the employment level in companies with fewer than 50 staff members, increased last December than it had since the previous summer, with around 95,000 jobs created.

So is it still difficult to find finance?

A report examining the American Dream of owning your own small business revealed that, despite all the positive news, around 3 in 10 owners were struggling to reduce their operating costs and 1 in 4 were struggling to plan when there were unexpected costs. Almost a fifth of small business owners surveyed said they were thinking of closing down because of lack of cash flow. 

These issues caused many small businesses to apply for funding, many of them applying more than once.  One in five of those interviewed said they had been turned down for finance in the past 60 months and 45 per cent of those, repeatedly been rejected.

As a result over a quarter of small business owners, according to the report, ended up financing themselves using their personal accounts, credit cards, or help from friends, putting themselves and their businesses at risk.

Securing small business financing can be complicated, and it is always best to seek professional help and advice to ensure you have the best possible chance of a good outcome for your finance application and a positive future for your business.

Primary key word – small business financing

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6 Reasons Sovereign Gold Bonds Are Safer Than You Think (Content Strategi)

6 Reasons Sovereign Gold Bonds Are Safer Than You Think

The Reserve Bank Of India will soon be issuing Sovereign Gold Bonds on behalf of the Government of India.

How They Work

Investing in Sovereign Gold Bonds is similar to investing in physical gold. Investors receive returns that are linked to the market price of gold.

The bonds are issued on payment of Rupees and are denoted in grams of gold. Investments can be as small as two grams or even as large as 500 grams per fiscal year.

These bonds will be available from designated post offices and individual commercial banks. When applying for a Sovereign Gold Bond, the potential investor includes a bank account. This account will be credited all rofits from the bond.

The bonds can be purchased through cash, cheques, demand drafts, and electronic fund transfers. They are paid upon maturity in direct payment credited to the bank account provided.

Sovereign Gold Bonds earn interest at the rate of 2.75 percent per year on the amount of initial investment. They will be available in both paper and demat forms.

Exiting The Investment

Though the tenor of Sovereign Gold Bonds is eight years, it is possible to exit the investment early. There are a few ways to do this:

● Trading the demat form of bond on the Exchange

● On the 5th, 6th, and 7th years there is the option of coupon payment dates.

● Approach the bank or post office purchased from within thirty days of the coupon payment date.

● Must be done at least one day before the coupon payment date.

Once early redemption has been completed, proceeds will be credited to the bank account provided when applying for the bond.

Better Than Gold?

Investing in physical gold can come with issues and risks. These problems are removed when investing in Sovereign Gold Bonds.

Sovereign Gold Bonds eliminate the risk and cost involved with storing gold. These bonds also remove the issue of purity level involved in gold jewelry investments.

Using Sovereign Gold Bonds In Other Ways

Sovereign Gold Bonds can also be used as collateral when applying for loans. The loan to value rate for Sovereign Gold Bonds would be the same as it is for gold loans.

The Sovereign Guarantee

Sovereign Gold Bonds carry a Sovereign Guarantee on both the capital invested and on the interest obtained.

The quantity of the investment is protected since payment when redeemed at the market price per gram.

Secure Records Prevent Loss

With Sovereign Gold Bonds, there is no risk of losing the bond. The files of the bonds are held in the books of the Reserve Bank of India.

When the bond is one month from maturing, a notice is sent to the investor. On the day it matures the proceeds are credited to the bank account on record.

Tax Exemptions

The capital gains tax on the profits from redeeming a Sovereign Gold Bond has been exempted. This exemption will transfer to the new holder if the bond is traded or transferred.

The only risk of Sovereign Gold Bonds is one attached to any investment based on gold. The risk that the market price of gold will drop.


Startup Trouble! Watch Out For These Five Legal Complexities When Starting Up (Rank Princess)

Startup Trouble! Watch Out For These Five Legal Complexities When Starting Up

Thinking of launching your startup? Stop and Read! Here are the five most common legal complexities to watch out for when starting up.

Getting to the stage where you have your venture up and running can be a difficult task even with the greatest ideas on mind. New entrepreneurs are more likely to run into legal complications, but this can be avoided. Careful assessment of the legal procedures and comprehension of the long-term effects can save a fortune and even make one!

Here is a detailed brief on legal issues to be kept in mind.

1. Improper settlement between co-founders

To avoid a probable legal feud between partners in the future, a proper settlement needs to be made between co-founders right at the beginning. Most legal hassles stem from misrepresentation of agreements between partners.

This, however, can be duly avoided by having a detailed, documented and decisive agreement made between the co-founders before any further incorporation. It is advisable to get this agreement made before registering as a private limited company.

2. Legal hurdles when raising the first investment

A lot of questions and decisions must be dealt with in the investment phase. All the legal formalities must be taken care of with regard to taxation, employment laws, intellectual property, business licenses, and contracts.

Due diligence must be made, and guidance must be sought from experienced entrepreneurs, investors, and professionals. With everything in check, raising an investment can be a rewarding experience. The right investment company must be selected by keeping in mind the income tax, returns, and policies.

3. Enforcement and negotiation of contracts

Startups enter various contracts with third-party vendors almost right from their inception. Contracts, as we all know, are legally binding and may lead to possible trouble if not properly enforced and negotiated.

It is important to assess the hidden clauses, the terms and conditions, and other legal aspects of the contract before submission. It may be so that a contract made with a PR agency allows it to walk out of the agreement under certain circumstances and this clause was not negotiated by the startup.

The concentration of power, loss of money and larceny are some of the outcomes of faulty agreements. This, however, can be avoided by cautious evaluation and suitable negotiation of the contracts. Help can be sought by hiring an expert for the enforcement and negotiation of dealings.

4. Improper asset handling

Asset mingling is the most common mistake made by entrepreneurs. It is important to plan properly and sort all the investments. There is a fine line between personal money and company budget; they must never be mixed.

Business accounts must be properly managed to avoid legal issues with partners and investors. Documentation of every payment, purchase and investment are completely necessary. Negligence on this part may come back biting hard in the future. Startups suffer from murky court trials and even arrests in some cases due to asset and accounting faults.

5. Taxes! They must be paid on time!

Taxation is the most important aspect to be taken care of; tax payment done on time ensures the company stays up and running without any legal trouble. Startups need to be aware of the tax system and its implications.

There are just too many cases of tax frauds due to negligence. The results can be devastating, ranging from fines and incarceration.

So, this can be avoided by simply paying the taxes.


What Monsoons Might Have To Do With Your Start-up’s Productivity? (Content Strategi)

What Monsoons Might Have To Do With Your Start-up’s Productivity?

Some might assume that the 21st-century urban entrepreneur is free from the vagaries of nature. Some might assume that, apart from the agro-industry, no one really needs to care about the eccentricities of the weather and least of all Internet start-ups. They would be categorically wrong.

Monsoons have a surprisingly strong and unquestionably harmful impact on start-ups’ productivity.

Rain, rain, go away

Quite simply, the monsoon rains and storms damage the rather vulnerable infrastructure that is used to maintain the Internet connections.

Without an Internet connection or at least a reliable one, start-ups struggle to keep up their operations. Most transactions and data keeping and updating are online. These vital operations become difficult without the Internet.

How important is the Internet to Indian start-ups?

Start-up companies in India are increasingly being based on the Internet.
Popular examples include PepperTap, CommonFloor, and UrbanLadder. In fact, even if the core of their work doesn’t relate to the Internet, they at the very least heavily rely on the Internet for most of their operations.

Without the Internet, it is very hard to imagine that India would have such a budding and lively start-up culture.

Are there any solutions?

Well, theoretically, yes. Practically? Not so much.

Most start-ups use either underground fiber networks or overhead cables. These structures are quite vulnerable to damage due to the rain and monsoons. In fact, even the lightest of stormy weather could cause power cuts in some areas.

And because of these power cuts, the transmitters that relay Internet signals don’t work. The solution would be to invest in a leased line Internet connection.

What is a leased line connection?

Well, to avoid going into recondite engineering definitions, suffice it to say that a leased line is much more resilient to monsoon weather.

With a leased line, the bandwidth that the client has asked for is reserved solely for the client’s use. That is, the connection is dedicated. Moreover, the hardware design is such that it just isn’t harmed by rain or storms.

Then what’s the problem?

The problem is, that leased line connections cost too much money. At least, from the point of view of start-ups.

By definition, start-ups function on initially low reserves of capital money. They don’t have a lot to invest.

And leased line connections can cost up to and more than ten times the amount they are paying for with the other connections, depending on the speed and reliability they desire. These costs can understandably be prohibitive to the start-up founders.

The Money Problem

For start-ups, lack starting capital and need to invest in the latest technology present a daunting conflict. Many start-ups fail because of lack of investment, and/or poor technological infrastructure. Examples include Shubhamilana.com, SASLAB Technologies, HashTag – to name a few.

Is The Grass Greener On The Other Side?

Unfortunately, the urban, hopeful Indian entrepreneur isn’t the only one hit by the rains. Another important victim is the rural, hard-working farmer.

The unpredictability of the weather combined with a lack of information about sustainable modern farming methods causes untold misery to farmers who depend on the rains for their daily bread.

Other URLs:

LSI Keywords: agro-industry, technological infrastructure, modern farming methods, latest technology, unpredictability of the weather


Masala Bonds – How They Work and How They Help India’s Investment Ecosystem (Content Strategi)

Masala Bonds – How They Work and How They Help India’s Investment Ecosystem

Since September 2015, the Reserve Bank of India (RBI) has given clearance to Indian companies to delve in Masala Bonds – an amazing way to expand a company’s market of investors to the world at the comforting rate of the rupee.

Almost a year later The London Stock Exchange welcomed Housing Development Finance Corporation (HDFC) into the UK stock market. They’ve raised Rs.3000 crore because of it.

NTPC also raised Rs.2000 crore from bonds dedicated to supporting alternate power sources and solutions.

This is just two of the bonds entirely worth 1 million USD the Indian Prime Minister Narendra Modi issued in the UK last year.

So, What Is A Masala Bond?

Before this concept, it was only common
for companies with foreign currency earnings to delve into international stock markets and diversify their portfolio of investors.

Foreign investors meant profits from stocks being in a different currency so; there was the conversion charge as well as a large part of your stock now riding on the economy of another country.

This meant that if the price of the INR fell, companies would have to put in more rupees to meet say, the same price in Euros.

It’s a loss-making strategy to depend on too many variables, and every company recognized that, so it was a rarely opted for choice for Indian companies.

It was only common for companies with foreign currency earnings to delve into international stock markets and diversify their portfolio of investors.

These bonds bridge the gap between the currency exchanges.

With this, stock buyers buy in INR, no matter where they’re buying from. It works out cheaper for investors as well as Indian companies.

With the stock dependent of the value of INR alone, business is steadier and can flourish under an expanded buying market.

Benefits of Bonds

They’re Rupee Denominated – Since most foreign investments come in a different currency, a stock will depend on the currency fluctuation of other countries. This is an added risk.

With bonds, investors pitch in using INR and help make our currency an international one.

  • Big Returns, For a Lesser PriceFor a foreign investor to buy stocks in INR works out best; for both the company and the investor.
  • Companies like NTPC, HDFC, Indian Railway Finance Corporation (IRFC), Adani Transmission, Shriram Transport Finance have all begun to put out international stocks and are making big bucks from it.
  • Additionally, it’s about 200 basis points lower in cost for companies when foreign investors buy their Masala bonds.
  • Safe and Secure – The RBI issues Masala Bonds and only allows foreign persons who have cleared the Financial Action Task Force’s examination to decide that the investor is not of malicious intent like an international money launder and a beneficiary for any terrorist organization.

This keeps the company-investor relationship a close one, even if they’re miles apart.

How Does It Benefit India as A Nation?

Masala Bonds help in roping in international investors and divert all eyes to the Indian stock market.

This sort of attention compels advice and feedback that is useful to companies so that they may increase their market value and the investor’s capital

If other nations invest in the long-term stability of the Indian Rupee, both intellectually and financially, it helps boost INR to international standards
and increase in value.

It is in India’s best interest to spread its stocks out to the world, so they can find value and give value to our economy and helps us grow into a


LSI Keywords: bonds, stock market, investor’s capital gain, investors, currency, market value of the rupee, stocks, Indian Stock Market


Grab Your Umbrella: Monsoons rain down problems on Bangalore Start-ups (Content Princess)

Grab Your Umbrella: Monsoons rain down problems on Bangalore Start-ups

        As those living in tropical climates already know, monsoon patterns can impact almost
every aspect of life. Particularly in the Indian Ocean, these seasonal variations in rainfall and wind patterns can have a drastic impact on things as far reaching as food prices, travel plans, insurance rates, and poverty rates.

Why do monsoons matter?

        Shifts in monsoon patterns are caused by the El Niño Southern Oscillation, a semi-yearly
change in ocean temperatures which causes a ripple effect through atmospheric patterns. Research has shown that global warming is exacerbating the effects of ENSO, causing more
extreme monsoons and more extreme dry seasons.

Yearly changes in ENSO patterns (image: appinsys.com)

Yearly changes in ENSO patterns (image: appinsys.com)

How do monsoons impact India in particular?

        The monsoon season is particularly important in India. It has one of the most extreme fluctuations in the wet and dry season caused by monsoons. It is also
host to one of the most strong tech industries in the world; Bangalore has long been called the “new silicon valley,” as it is home to over 30{ed162fdde9fdc472551df9f31f04601345edf7e4eff6ea93114402690d8fa616} of start-ups in the

        India has experienced serious consequences
from global warming: the country is experiencing record temperatures year after year, and the annual monsoon has been delayed three years in a row, causing
serious fluctuation in crop and energy prices.

        Bangalore startups are particularly impacted by monsoon season, because without the extensive infrastructure of an established company, it can be harder to
bounce back from environmental changes such as monsoons.

image: newindiaexpress.com

image: newindiaexpress.com

        Entrepreneurs can be the most prepared, well-planned, organized managers of their start-ups, and still, they cannot quite buffer themselves from the
effects of monsoons.

        Business and tech are expanding extremely rapidly in India, but much of the infrastructure has been rapidly constructed as well, sometimes leading to
insufficient systems to handle the needs of a huge population.

Startups and Internet in Monsoon Season

        Internet connectivity, in particular, is an extremely big problem for start-ups during monsoons. Start-ups often depend on overhead lines or underground
fiber cables for their connections.

        Larger companies who can afford dedicated leased lines do not suffer from as many connectivity problems. Start-ups using less expensive internet options
often experience loss of connection in conditions as tame as gentle rain.

        Worse, it is very difficult to tell whether, in any given meteorological event, the internet will keep connected or not. Therefore, it is hard to plan the
week and set strict deadlines for projects, since it could be impossible, logistically, to keep them. Planning a big event or conference could go
completely haywire if the internet in the neighborhood goes down due to a fallen tree. We depend on the net for almost everything, and a start-up could
suffer even more if the loss of connection happens to occur on the due date for a big bill or contract processing.

Looking to the future: rural vs urban impacts

        However, in other respects, many businesspeople believe the importance of the monsoon for the investment market overall is in decline. Even though the
monsoon may be becoming less predictable, its largest impacts are on rural populations. As time goes on, the stock market is being dominated not by energy
or agricultural staples but by urban consumers and businesses.

Further reading:

keywords: startups, Bangalore startups, India, monsoon, El Niño Southern Oscillation,


Seven Common Myths About Sovereign Gold Bonds Busted! (Rank Princess)

Seven Common Myths About Sovereign Gold Bonds Busted!

We’ve all heard about the Sovereign Gold Bond Scheme where investors get returns denominated in gold, mimicking the benefit of real gold. While this is a very beneficial scheme and allows you to use the bond for collateral loans or stock exchanges, there are a lot of popular myths and misguided facts about this plan, which are about to be cleared in this article. Here are the common myths about this scheme:

1) “This Scheme Is Not Government Approved” (MYTH)

This is a huge myth and is probably a crucial reason for many people to reconsider such a scheme.

Sovereign Gold Bonds (SGB) are government approved and are issued by the Reserve Bank Of India.

So there’s no dubiousness about your safety, as there is no chance of fraud occurring!

2) “Bonds Are Available Whenever, And Wherever!” (MYTH)

If you’re under the misconception that you can apply for a bond at any point throughout the year, then you’ve not wait received the right information.

SGB reissued in batches and of the Rs.15,000 crore bonds available, the first batch is said to be available from November 5th to November 20th, consisting of Rs.1,000 crores. All public sector banks in the main cities should possess the necessary information on these bonds if one decides to purchase it.

3) “Anyone Can Invest In This Scheme!” (MYTH)

Get out of the myth that the SGB is for everyone! Only citizens of India can invest in this scheme, and this strictly excludes NRIs.

4) “You Can Stay Incognito As Per Your Benefits!” (HUGE MYTH)

You can invest in this scheme unless you have undergone a KYC, thus identifying your personal details. This means that at the time of applying you’d have to present your PAN card (Aadhar Card Is Also Acceptable). So if one has the plan of converting their unaccounted cash into white ones, then they’re in for a nasty surprise!

5) “Avoid Further Taxations!” (MYTH)

Whoever came up with this tale has quite an internet following because this one had spread rapidly. The interests you earn out of this scheme are taxable every six months! Once your bond matures, a long-term capital gain will also be applicable meaning you’d have to shell out a 20{ed162fdde9fdc472551df9f31f04601345edf7e4eff6ea93114402690d8fa616} tax on your returns.

6) “There’s No Upper & Lower Limit for Bond Investments!” (BIG MYTH)

This is not factual, and there is an upper and lower limit for investments in this scheme! The bare minimum bond one has to buy is 2 grams worth of gold, while the maximum gold bonds can be up to 500 grams. Seeing as the fixed price for the gold is at Rs.2, 600.00 (Approx.) per gram of gold, your minimum, and maximum investments would start from at least Rs.5, 200.00

7) “Quit When You Want To” (MYTH)

The bonds issued have eight year tenure, offering an option of exiting only after the 5th year! Trading bonds on the market is also an option subject to the goodness of volumes. If the later is negated, then one can only receive his/her money after the eight or five year tenure time.

Stay Informed:

So get out there and invest wisely, and keep in mind the truth and only the truth while investing in these schemes! Happy investing to you.


Are Sovereign Gold Bonds The Right Investment For You? (Rank Princess)

Are Sovereign Gold Bonds The Right Investment For You?

With the recent changes in the Budget, investors and earners are asking themselves if they should invest in sovereign gold bonds. If you’re one of them, or not sure about what these bonds are, here are a few basic things people should know about sovereign gold bonds.

What are Sovereign Gold Bonds?

“Bonds” allow you to buy or invest in gold without the hassle of actually dealing in physical gold. Instead, you have a bond which is a paper tracking the value of real gold. On top of that, the bondholder also earns interest.

Who Issues These Bonds?

Technically, the RBI is the source of these bonds. But they are actually marketed by various actors like banks, Post Office, Non-banking Finance Companies, and brokers or agents. These actors are paid a commission for selling these bonds to investors.

So, to do away with a common doubt – you don’t have to buy these bonds from your bank. You can go to another bank. You can also approach any of the entities mentioned above to invest in bonds. Specifically, National Savings Certificate agents are allowed to issue these bonds as well.

Can Anyone Invest In These Bonds?

Well, not anyone. These bonds are restricted to Resident Indians and entities like Hindu Undivided Families, Trusts, Universities, and charitable institutions. NRIs are excluded from this club.

How to Buy These Bonds?

You can buy a fixed amount of gold, measured in grams. The cost will depend on the preceding week’s effortless average of closing price of 99.9{ed162fdde9fdc472551df9f31f04601345edf7e4eff6ea93114402690d8fa616} pure gold published by the India Bullion and Jewelers Association Ltd. (IBJA).

Just like with physical gold, investors need to show adequate Know Your Customer (KYC) documentation. These include Voter ID, Aadhaar card/PAN or TAN /Passport.

The bond can be in paper format, and will specify all these details about the transaction. The Stock/Holding Certificate can be changed into demat form as well.

Minors can also invest in these bonds, with their guardian vouching for it.

There is a minimum amount of gold you have to buy – 2 grams. Nothing lower than that is permitted. Bonds are issued in denominations of 2, 5, 10, 50, 100, and 500 grams of gold. On the other hand, there is also a maximum limit of gold you can buy – 500 grams per fiscal year.

What’s the Interest Like On These Bonds?

Well, the Government may change the interest rate every time they issue these bonds depending on the international and domestic market conditions for gold. The interest earned by the investors is taxable.

How Long Do These Bonds Last?

They have a lock-in period of 5 years, where there is an exit motion. Apart from that, these bonds have a period of 8 years.

Can I Borrow Money Keeping Bonds As Collateral?

Loans can be issued keeping these bonds as collateral, and the Loan to Value is set equal to ordinary Gold loan. This LTV is mandated by the RBI regularly.

So, that’s all the basic stuff you need to know about the sovereign gold bond. While they can be a great, reliable long-term investment, one should be aware of the Budget policies. Not that there’s any risk involved, but every investor has his/her own needs.

LSI Keywords: sovereign gold bonds, physical gold, bonds, real gold.