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Question
High Order Thinking Skills
Assuming that you wish to start a small scale industry for manufacturing and selling detergent powder, discuss how would you seek support of financial institutions.
Solution
Yes, to start with a small scale industries for manufacturing and selling is really a tough job in this competitive world where already many other detergent manufacturing units are there. Detergents are also known as synthetic detergents. They are different from oil-based soap though both soaps and detergents are surfactants. There are a number of varieties of detergents varying in percentages of active matter present in them and also different colours. Manufacturing process is very simple and only mixing is involved. Hence, this product is best suited for manufacturing in small-scale sector.
An entrepreneur can seek support from various financial institutions and others.
- Angle Investors:
• Business angle or an angle investor is an affluent individual who provides capital for a business start-up and early stage companies having a high- risk, high-return matrix usually in exchange for convertible debt or ownership equity.
• Apart from investing funds, most angles provide proactive advice, guidance, industry connections and mentoring start-ups in its early days. - Venture Capitalist:
• Venture capital is an equity based investment in a growth-oriented small to medium business to enable the investors to accomplish objectives, in return for minority shareholding in the business or the irrevocable right to acquire.
• The private equity capital provided as funding to early-stage, high potential, high risk, growth up companies/entrepreneurs who lack the necessary experience and funds to give shape to their ideas.
• Accordingly, it is more accurate to view and go for venture capital broadly as a professionally managed pool of equity capital.
• Venture capital is a way in which investors support entrepreneurial talent with finance and business skills to exploit market opportunities and obtain long-term capital gains.
State Financial Corporations (SFCs):
- It will be to meet the financial needs of small and medium enterprises, established as development banks for their respective regions. Under the Act, SFCs have been established by state governments to meet the financial requirements of medium and small sized enterprises. There are 18 SFCs at present. According to the location I can easily approach the same.
- Grant of loans and advances to or subscribe to debentures of, industrial concerns repayable within a period not exceeding 20 years.
- Guaranteeing loans raised by industrial concerns which are repayable within a period not exceeding 20 years.
- Guaranteeing deferred payments due from an industrial concern for purchase of capital goods in India.
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