Finance & Cash Flow
The question is rarely “where can we get money?” It is “what kind, for what, on what terms?”
Owners often hear about funding as a list of schemes and products. What helps more is a map: what each source is, what it is suited to, what it costs, and what it asks in return. This session lays out that map for micro, small and medium enterprises and teaches the questions that sort one option from another, without recommending any.
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Money from the wrong source can cost more than the problem it solved.
A long-term need paid for with short-term money forces a business to keep refinancing. A thin-margin trader funded by equity gives away ownership for no reason. A business that waits for a scheme when an earlier collection would have solved the problem loses months. In each case the funding was available; the match was wrong.
Information about schemes also dates quickly. Limits, eligibility and fees change, and some products are advertised more than they are available. So this session teaches how to think about funding and where to find current, official details, rather than listing figures that may be out of date by the time they are read.
What the session covers
35 topics across 7 areas. Seven parts, from the purpose of the money to the next step.
Start With the NeedThree questions before any source.5
- What is the money for: stock, a machine, premises, a launch, covering a gap?
- How long will it be needed, and how will it be repaid?
- What happens if sales are a fifth lower than planned?
- Could the need shrink with changes inside the business?
- Short-term needs on short-term money, long-term needs on long-term money
Money Already in the BusinessThe cheapest source is often the first one.5
- Retained profit and the owner's own savings, with care for family needs
- Faster collections and tighter stock, as in the working-capital session
- Supplier credit and customer advances
- What each costs in goodwill and risk
- Family and friends: written terms protect the relationship
Bank and NBFC FinanceThe mainstream route.5
- Term loans, working-capital limits, equipment and vehicle finance
- Banks, small finance banks and RBI-registered NBFCs, in outline
- What lenders look at: records, track record, cash flow, security
- The cost of a loan beyond the interest rate, covered in the loans session
- Preparing the paperwork before the first conversation
Check current terms with the lender, and take your CA's advice before signing.
Government-Linked SchemesUseful, with conditions, and always changing.5
- Mudra loans, in categories by size, from small amounts up to ₹20 lakh as of the October 2024 change
- The Credit Guarantee Scheme for micro and small enterprises, which guarantees the lender so that loans can be made without collateral; it protects the bank, not the borrower
- PMEGP, a government programme for setting up new micro enterprises with a bank loan and a margin-money subsidy
- Stand-Up India, which supports bank loans to women and to SC and ST borrowers for first-time ventures
- Udyam registration, which many schemes expect
Limits and rules change. The session names the official site for each scheme, and owners should check current terms there and with their bank.
Selling ReceivablesFunding from the invoices you already hold.5
- Invoice discounting and factoring, in outline
- TReDS for MSME sellers to larger buyers, covered in its own session
- When it suits a supplier, and when the fix lies elsewhere
- The annual cost of waiting, as a way to compare
- Dependence on one buyer, and the risk of concentration
Equity and Outside InvestorsA different bargain.5
- Giving a share of the business for money, and what that means for control
- Which kinds of business investors usually look for, and which they do not
- Angel investors, venture funds and other investors, in outline
- Why most MSMEs do not need equity, and some should not seek it
- Terms to understand with a lawyer before agreeing any
Equity is a long-term relationship. The session does not suggest it for any particular business.
Comparing and ChoosingA page, not a spreadsheet.5
- For each option: purpose, cost, repayment, security, what you give up
- The worst case for each: what happens if the plan goes wrong
- How long it takes, and what you must prepare first
- Who to speak to next: bank, CA, scheme office
- Writing down the next step and a date
What participants work through
- A one-page funding plan: need, term, repayment, possible source
- The worst-case question for each option they are considering
- A list of official sites to check for each scheme
- The next question they will ask, and of whom
What this session is not
- Individual financial advice or a recommendation of any lender, scheme or investor
- A promise that any funding will be approved
- A pitch event, a matching service or a loan fair
- A complete or current list of every scheme
How the session runs
Two to three hours. A finance or banking practitioner draws the map with the room, using made-up examples, and names the official source for each scheme. Participants then complete a one-page funding plan for a need of their own, or for a made-up one if they prefer. No lender, scheme agent or investor is invited to promote anything. Because scheme details change, the practitioner shows where to find current rules, and owners are encouraged to check them and to consult their CA. The session gives general education, not advice on any individual business.
What your students leave with
- A map of the main funding sources open to an Indian MSME and what each is suited to
- A habit of starting with the purpose of the money and how it will be repaid
- A way to compare options on cost, risk and what you give up
- A grounding in how government-linked schemes work, and where to check them
- An understanding of when equity funding fits, and when it does not
- A one-page plan listing their need, a possible source and the next question to ask
Scheduled sessions
Nothing scheduled yet
Sessions are arranged with a college once a date is agreed. Ask us and we will find the right person for it.
A student rather than a college? See what is coming up, or ask your placement team to host this.
Start with the purpose. The source follows from it.
Tell us who your students are and what stage they are at. Sessions are free for participants.