Debt Funding

FDI Invest India selectively supports Debt Funding for deserving qualified and established businesses. Debt comes in many forms but generally involves borrowing a sum of money, which is often secured against a tangible asset. The debt is repaid with interest at an agreed future date. Ideally your business should have a financial track record to secure debt. You also need be able to demonstrate that you can repay the money borrowed.

• High street banks
• New challenger banks
• Peer-to-peer lenders
• Specialist debt providers
• Specialist loan funds – both public and private sector

Debt is often a cost-efficient way of getting the finance you need for the short to medium term. The cost of using debt depends on the interest rate and the length of the loan (plus any arrangement fees that some lenders charge).After you've paid the interest and repaid the principal, the debt financing will no longer cost your business money - a key difference from equity funding. Equity investors generally have an ongoing say in how your business is run. You'll need to make your repayments on time and keep all terms and conditions. Debt providers will only intervene if you fail to make agreed payments of capital or interest, or breach any terms and conditions. There are many kinds of debt funding products available. These include:

• Term loans
• Overdrafts and working capital facilities.
• Invoice discounting.
• Asset finance.

• If you have revenue
• Don't want to sell part of your business, and
• Want a straightforward repayment programme with a simple cost structure