Business Loan
Business Loan
Many times businessmen find themselves in need of credit to expand or fund their business for multiple reasons. They need the funds to buy some equipment, working capital gap, payment to creditors, pay off business dues, pay employee’s salaries, to expand, etc. Businessmen can’t put the funds in line from their savings. Thus they opt for business loans. The business loan works as the perfect financial aid for such situations. Taking a business loan is always a safe and easy way to tackle your business-related financial needs. You can also apply for a business loan if you want to start a new business. The terms and conditions to avail such a loan are different than the loan taken for already running businesses. Each business is different in various aspects thus it requires different documents and is applied to different criteria. That’s why banks and NBFCs offer customized business loan plans as per the requirement of applicant/s. These plans are applicant/s centric and made with keeping financial alternatives in mind. Banks and NBFCs also offer special loans for women entrepreneurs. They are customized business loan plans for women to service their needs and give them a chance to build a competitive business in the market.
Why should I take a Business Loan?
Businessmen or entrepreneurs take a business loan to meet their various business-related needs. We have listed a few of them below
Business loan for working capital
Even in an ongoing business, businessmen require an ample amount of funds to sustain and fund their daily operations. These loans help them to be sustainable soon and it can be paid off once the business starts to grow. This type of loan comes handy in a situation when the business earnings are not adequate.
Business loan for business expansion
Every entrepreneur wants his or her business to flourish beyond the boundaries of its local position. This thought comes to their mind when the business starts to grow in its initial location and there is a positive flow of profit. Businessmen understand the need and urge to expand their product ie. the very own business. But expanding the business beyond local capacities is not easy, financially speaking. It surely needs a strong monetary backing to meet with the needs of expanding the business. Whether its location, equipment, new recruitments or paying for the new communication channel, businessmen need a bucket full of finance. Thus they opt for a business expansion loan. By taking this loan, businessmen make sure that their respective business touches new heights of success.
Business loan for buying machinery or equipment
Almost all types of businesses need specific machinery or equipment for smooth functioning. Many times these types of equipment are higher in price. Thus businessmen opt for this type of loan to buy such equipment and pay it off with profits which will come from the use of this equipment or by putting them out on lease later.
Business loan for developing infrastructure
Having a well built exquisite infrastructure is one of the key points of a business. Your clients many times judge you from the infrastructure you work within. Also, it is easier for many businesses to have a well-sorted customized infrastructure for smooth day to day affairs. Having any kind of infrastructure, small or large, does not come in cheap. Thus businessmen opt for this type of loan.
What are the different types of Business Loans in India?
There are many types of businesses in India which require various types of loans. To match all of their needs, banks and NBFCs have come up with various types of business loans. Some of these are mentioned below:
Business loans by government
The government of India helps various small businesses by offering them business loans under various schemes. One such scheme is Micro Units Development and Refinance Agency Ltd, also known as 'Pradhan Mantri MUDRA Yojana'. It was started with one goal: fulfilling all the funding needs of non-cooperative small businesses. Through this scheme, loans are sanctioned to the elderly and minorities, for factory their business needs
Micro business loans
This is a type of small business loan which gives you a smaller repayment term. The maximum repayment term for microloans is 6 years.
Business loan for buying machinery or equipment
Almost all types of businesses need specific machinery or equipment for smooth functioning. Many times this equipment is higher in price. Thus businessmen opt for this type of loan to buy such equipment and pay it off with profits which will come from the use of this equipment or by putting them out on lease later
Business loans for self employed professionals
This is a type of unsecured loan which is given to self-employed professionals. The loan amount varies from Rs. 25,000 to Rs. 75,00,000. The amount depends on the applicant's financial status and history. Self-employed professionals include CA, CS, doctor, engineer, architect, trader, commission agent, & contractors.
Business loan to finance a project
This type of loan is given for a long term specific business project. The company has to present a project assessment report on which the loan is granted.
Business loan to finance equipment
Almost all types of businesses need specific machinery or equipment for smooth functioning. Many times these types of equipment are higher in price. Thus businessmen opt for this type of loan to buy such types of equipment and pay it off with profits which will come from the use of these types of equipment or by putting them out on lease later.
Business loan for working capital
Even in an ongoing business, businessmen require an ample amount of funds to sustain and fund their daily operations. These loans help them to be sustainable soon and it can be paid off once the business starts to grow. This type of loan comes handy in a situation when the business earnings are not adequate.