Not all loans come from banks. And not all capital needs equity.

A mid-sized manufacturing business owner once asked me:

Another founder of a B2B services firm said:

The answer is yes—but only if you meet a few non-negotiable conditions.

Raising funds through bonds or non-convertible debentures (NCDs) isn’t just for listed corporates or startups.

Small and medium businesses with stable revenue, discipline, and track record can also explore this route.

Let’s walk through a practical checklist to see if your business is ready for structured debt from the market—not just from the bank.

Step 1: Do You Have a Track Record of Profitability?

✅ At least 3 years of operational history

✅ Consistent profits in at least 2 of those years

✅ Audited financials available and clean

Why it matters:

Investors who buy bonds or NCDs want assurance of repayment. They’ll look at your historical cash flows and net margins—not just projected growth.

This is debt—not optimism.

Step 2: Are Your Revenues Predictable or Contracted?

✅ Monthly or quarterly billing cycles

✅ Repeat clients or purchase orders

✅ Inventory, receivables, or assets that can be used as collateral

If your income is lumpy or seasonal, repayment becomes riskier.

Predictability gives investors confidence—and helps you secure lower interest rates.

Bonus: If your revenue is B2B or government-backed, that’s even stronger.

Step 3: Do You Know How Much You Need—and Why?

✅ Clear funding purpose (e.g., expansion, working capital, CAPEX)

✅ Defined payback plan over 2–5 years

✅ Internal cash flow projections with EMI planning

Never raise debt “just in case.”

Raise it with a defined ROI and structured repayment.

Debt without discipline becomes stress.

Step 4: Is Your Compliance and Paperwork in Order?

✅ GST and TDS filed on time

✅ ROC filings clean

✅ No tax or regulatory disputes pending

✅ Board resolutions (if applicable) ready to approve fundraising

If your paperwork is messy, no investor or institution will back you through bonds.

Remember: NCDs are regulated financial instruments.

You need to meet the bar—even if you’re not listed.

Step 5: Are You Open to External Scrutiny and Reporting?

✅ Willing to share quarterly or semi-annual business updates

✅ Can handle audits or credit monitoring from rating agencies or investors

✅ Comfortable working with a financial advisor, trustee, or legal counsel

Bonds and NCDs come with post-issue accountability.

If transparency makes you uncomfortable, stick with traditional loans.

Bonus: When NCDs Work Better Than Loans

Consider NCDs if:

• You need ₹2 crore or more

• You want longer tenure (3–5 years) than banks usually offer

• You don’t want to dilute ownership

• You want structured terms (e.g., bullet payments, flexible coupon)

And yes—you can privately place NCDs with HNIs, NBFCs, or family offices even if you’re not listed.

✅ Checklist: Are You Ready for Bond or NCD Funding?

7 out of 8 checks?

→ You’re likely ready to explore structured debt seriously.

TL;DR – Too Long; Didn’t Read

• NCDs and bonds aren’t just for corporates—they’re viable for mature SMBs with financial discipline.

• You need clean books, steady cash flow, and a strong repayment plan.

• Use bonds for growth—not survival. And know your numbers before you issue.

• Private placements allow you to raise debt without the delays of banks or the dilution of equity.

• Compliance, clarity, and credibility make your business fundable.

You don’t need to be listed to raise like a listed company.

You just need to be transparent, profitable, and prepared.

If you run your business with maturity,

the market may fund you with trust—and terms you control.