Alternate Funding Options
Understand. Act. Benefit.
Raising money to grow businesses is not just acceptable today, it is the only route to grow, expand and create wealth. This in turn ensures that economies remain stable and move forward on the road of prosperity. The choices, then, refer not to if, but rather how, businesses must raise funding to ensure that both current plans and future goals are realised. In the post liberalisation scenario, India has metamorphosed into the proverbial swan; it is considered a premium destination for foreign investors to put in money. It is hence a key to have a thorough understanding of the alternative funding options available.
At the same time, India poses unique and interesting challenges to potential investors. Navigating these successfully requires not just knowledge of the options, but how exogenous factors can impact them.
Deloitte’s paper on Alternate funding opportunities first evaluates the more traditional options available in funding. Typically, this refers to equity and debt financing. The paper also contextualises the alternate funding options available within the unique challenges and implications, namely, exchange control and taxation. It then goes on to provide yet another option in the alternative funding hybrid option. This option would be of particular interest to foreign investors who are looking at options in a constantly evolving and dynamic marketplace, in order to find the optimum solution.
As we work through the paper, we will move beyond the pure debt and equity financing options, understand its respective positives and limitations and explore other alternatives.