Every small business requires funds to manage its daily operations and also to initiate growth activities. This continuous inflow of capital will be needed until the business becomes self – sufficient. After which every business moves towards expansion and tries to grab the best opportunities for growth. These can be in the form of larger working space, hiring more employees, procuring new machinery and investing more capital in marketing strategies.
No matter what the requirement is, a small business loan will definitely help in boosting your business cycle. But before you opt for one, here are some features you must know about them:
6 Things required for Small Business Loan
- No collateral is involved
Many lenders provide Small Business Loan in India at zero collateral. This means no asset such as a car or home must be pledged while procuring a loan. This feature also simplifies the loan application procedure as less or no time is wasted in the documentation.
- Improves Credibility
A small business loan can be beneficial in building a strong credit history for your venture. Lenders are just like borrowers they don’t want to get involved in a risky deal and having a bad credit score will just worsen your chances of securing a loan. By taking small business loans and paying them on time, you will gradually build your credit score. This, in turn, will increase your chances of securing a bigger business loan.
- The flexibility of funds
Under the small business loan scheme borrowers can get more funds than they are eligible for. This is a great benefit over other loan schemes. Also, the government has passed a resolution under which entrepreneurs of new ventures can avail a loan of up to 1 crores at the lowest possible interest rates.
The flexibility of payments
Lenders like banks, financial institutions, and digital platforms offer the facility of easy repayment. This means that small ventures can pay back the loan without disturbing their present business cycle. Such flexibility converts repayments into an opportunity for growth and development of the business.
A Line of Credit
Small business loans empower the ventures with a flexible line of credit. Under this feature, businesses are provided a certain approved loan amount which they can withdraw at their own will over a fixed period of time. Also, they only have to pay for what they have used from the approved line of credit.
For example, you took an approved credit of INR 15,00,000 and only utilized INR 2,50,000 in your business. So your payment liability would only be INR 2,50,000 (i.e. the amount you had withdrawn).
Fast and easy approval/ disbursal
If you apply for a small business loan through an online platform you will discover the process is less time consuming and the funds are transferred into your account within 3 working days.
For best online loan offers, have a look at Indifi’s digital lending platform. You will get customized loan solutions for every need of your business. Also, their usage of big data analytics has simplified the process of online loan approval and disbursal making it fast and efficient for borrowers.
In the end, take out the time to review your options. Make sure you are getting the best deal from your lender. Also, forecast your repayment schedule and business earnings carefully. When you do this, a small business loan will definitely aid in your business journey.