How to open a financial company?

Starting your own finances is not a task for amateurs. It requires planning, a lot of reading, and mainly, a lot of knowledge of the Indian financial system. The current legislation is very strict with financial services, and understanding it will help to open a financial company and finance company registration procedure on the right foot. But what are the other necessary steps? How do open a financial company the right way?

How to set up a finance company: the basics

The legal organization of the preparation, registration and filing of documents usually takes up to 12 months for the start of your finances. This processing time depends a lot on your level of preparation for the information requirements.

Opening a finance company has variable costs, but it is good to prepare well mainly for working capital. Default rates can be very high and cause serious damage to your finances, in addition to costs with documentation, registration, hiring employees, equipment, rent, etc.

The initial costs and capital can come from you or they can come from one or more investors. Often, those who want to open a finance company will raise funds with one or more partners. If you want to cut costs, opening a branch or franchise of a financial company can be much better, since these institutions have all the know-how you need to open your business, saving you time and money. 

Read Also: how to get NBFC Registration in India

Assemble a financial: the requirements

With regard to those responsible for finance, the following information is necessary for the opening of the business:

• Full name, date, and place of birth, nationality, permanent address, and occupation

• Certified copy of photo identification document (such as passport or driver's license)

• Minimum capital for the opening of the financial

With this information in hand, it is necessary to obtain prior authorization from the Central Bank to regularize the operation of the financial institution. It is good to have a well-structured business plan at this time, which will help both in the approval and the success of your finances.

It is recommended that those interested in opening a finance company have an association with accountants and lawyers specializing in the financial sector. These professionals are essential to the success of your business. Consult these professionals before applying to the Central Bank to avoid problems.

How to open financial: the beginning

In the case of an accredited financial institution in India, the creation of your business requires special attention to the application process. The banking sector is heavily regulated. In addition, the initial capital for opening a financial company is very high, even if it is a franchised financial company.

In the beginning, it is necessary to understand that high investments in advertising, marketing, dissemination, employee training, training, and of course, the costs of rent, equipment, etc. will be necessary. These investments are not accounted for as the starting capital for the company, which is the "spare" money to provide the loans.

Read also: How to get EPR Certificate in India

It is also important to know what types of services and products in the financial market your finances will start with. You can start with payroll loans, which have more collateral and provide less risk to your company. Then you can increase the service package for personal loans or even vehicle financing. However, for each new service offered there may be new regulations, and you need to keep your eyes open to the legislation, thus avoiding legal problems for your company.

The tendency of a well-managed financial company is to gradually start providing services to a bank, such as investment funds, checking accounts, and savings accounts. But it all depends on your planning and dedication.