Question
Difference between seed capital and margin money.
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S.No.
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Basic
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Margin Money
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Seed Money
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1.
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Meaning
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When an entrepreneur raises capital through Bank or financial institution, then if he has to contribute some percentage of the total borrowed/released amount by the bank or institution on behalf of the entrepreneur as margin money.
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Capital needed to set up a new business or enterprise. It can be obtained from owners or his/ her relatives or from outside sources.
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2.
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Security
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No collateral security is required at the time of margin money contribution.
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It depends upon from where an entrepreneur had taken money. If relatives no security is required but if it is from private money lender then he can ask for security.
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3.
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Conditions
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No bank or financial institution will be ready to finance the project unless margin money is contributed.
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Entrepreneur can take money from any person like moneylenders, relative friends, various agencies, financial institutions means no condition are there.
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