What is a Business Loan?
Businesses have multiple options to secure funding, be it internal sources or external options. When a business opts for an external source, such as borrowing from a bank or lender, it is referred to as a business loan. This means securing a line of credit or raising funds at a specific interest rate that is to be repaid within a definite timeframe.
Depending upon the business’s reputation, creditworthiness, and nature, the lender may agree to offer a secured or unsecured business loan. The money can be used to expand operations, meet working capital requirements, purchase plants and machinery, or invest in real estate. Business loan for women also helps them to get financial help whenever they needed.
Different lenders offer different types of business finance that may include small business loans, startup loans, and even business loans for women. Continue reading to understand the importance of business loans and how they can help to improve the operations of your organization.
Types of Business Loan In India
From Capital (or term) Loans to meet your day-to-day requirements to Merchant Cash Advance Loans to expand your customer reach, select one of these business loan options from this list to get your work done. The type of loan will help you determine how to get a business loan approved in the shortest time.
1. Term loan:
Term loan provide flexible repayment options on low-interest rates. With Indifi, you can get up to Rs. 50 lacs with the lowest processing fee of ~4%. The payment options are highly flexible with the longest permissible tenure of 36 months (3 years). It comes with an astonishingly low interest rate on a business loan of 1.5% per month to reduce the pressure of repayment.
2. Working Capital Loan:
Working capital loan is taken to meet the short-term cash shortage or when the business’s cash is not enough to take care of the day-to-day operations. Nowadays, financial institutions offer collateral-free working capital loan that are usually taken for 6-12 months.
Benefits of Business Loan From Union Credit Fin
Union Credit Fin has an online process of loan application that guarantees minimum documentation and quick disbursal of payment. We use smart technology to check applicants’ profiles carefully, so they don’t need to provide any assets or property as security for the loan. Therefore, you can get a unsecured business lending to fulfil your immediate needs
We follows a swift and hassle-free loan disbursal process. You apply for business loan and get it processed within 48 to 72 hours for an amount up to INR 50 lacs.
For small businesses seeking flexible repayment structures to meet their operational requirements, Indifi has flexible repayment options at low-interest rates starting from 1.5% per month. Companies also enjoy instant GST business loans by applying at Union Credit Fin.
There is no one-size-fits-all model when it comes to business loans. Indifi has tailored solutions with the help of multiple lenders to meet the dynamic funding requirements of every company.
The business loan interest rate rolls-out at low, starting from 1.5% per month. However, the borrower also needs to pay upto 4% processing fee.
From application to EMI repayment, you can apply for a business loan online at Indifi. Thus, there is no scope for finding any hidden charges during the loan repayment.
How to Apply for Business Loan Online ?
The application process for a business loan is free from unwanted delays and unnecessary paperwork across india. You can apply for a business loan online by fulfilling these requirements for a business loan.
Fill in your basic and company details. Mention your fund requirements and prepare the essential documents for submission.
Upload the scanned copies of the documents needed for a business loan like business registration proof, bank statement, PAN card, Aadhaar card, Company PAN card, Partnership deed, Drug Licence, VAT Registration, and GST filing as applicable.
Once the correct documents and the filled application form is duly submitted, Indifi will process your application and send the approval within 72 hours. After getting the instant business loan approval, your loan amount will be disbursed immediately in your bank account.
Do’s and Don’ts of Small Business Loans
Do's
- Do Analyze Your Business Requirements:
- Do Compare Different Financial Institutions:
- Do Opt For Specialized Lenders:
- Do Create a Realistic Budget:
- Don’t Rush for the Loan:
- Don’t Hesitate to Ask Questions:
- Don’t Make False Estimates:
The first step to applying for a NBFC business loan is to understand why your business needs it. Conduct in-depth research to understand its financial requirements and the different ways to meet them. Opt for a loan if there is a genuine need for one.
Every institution has its terms and conditions attached to a loan. Comparing different lenders before borrowing will allow you to analyze their interest rates and other terms and conditions to find the one that best matches your needs.
Various specialized lending institutions cater to medium and small businesses, offering tailored business loan without collateral. The loan conditions of these lenders are often easier and better aligned with your business needs in comparison to other large-scale commercial banks.
Setting a realistic budget not only makes the GST business loan application process easier but can also help you avoid financial trouble in the future. Define a budget that clearly states the purpose of the loan, its tenure, and the repayment process you want to follow.
Don’ts:
Even if you are in urgent need of money, do not settle for the first unsecured business loan offer that comes your way. Instead, take time to carefully evaluate each offer so that you can prevent any unnecessary expenses and understand the long-term impact of the loan on your business.
Business loans, especially a business loan for women, can get complicated if you don’t fully understand their terms and conditions. So, if you come across any doubts, ask them freely! You can even seek expert advice for better understanding.
It is never a good idea to underestimate your expenses or overestimate your income. Take the time to assess your expenses carefully, keeping in mind that they might increase in the future due to rising interest rates and inflation. Similarly, keep your income estimates realistic. Painting an overly positive picture can lead to difficulties if things don’t go as planned. Being realistic helps you stay prepared for unexpected changes.
EMI Options To Repay Business Loan
Equated Monthly Instalment (EMI) are the monthly repayments that are made over a fixed tenure to repay the loan amount with interest. Calculating emi made easy with loan EMI calculator. Indifi, one of the most reputed financial institutions in India, offers two modes of business loan repayment.
- Flexi EMIs
- Fixed EMIs
Indifi has partnered with many lenders to deliver a transparent and flexible repayment system. With Indifi’s Flexi EMIs, you can repay within 36 months as per your convenience
If you prefer the stab ility of fixed EMIs, Indifi business loans can be repaid with fixed monthly instalments. This EMI is calculated by adding the principal loan amount and the collective interest.
Who Can Take a Business Loan?
Business loans offer the financial stability of managing the everyday expenses of a company. From budding entrepreneurs and small business owners to large Private LTD. Companies, every eligible candidate can apply for a business loan in India from a bank or financial institution like Indifi.
Here are the types of entities that are eligible for a business loan in India:
- One person company
- LLP
- Private Limited company
- Partnership
- Proprietorship
The collateral-free loans allow access to unrestrained cash flow for small businesses. With these funds, companies can leverage the following benefits:
- Instant Business Growth
- 24/7 Quality Service
- Easy Customer Service
- Quality Cost Service
How to Improve the Chances of Getting Instant Business Loan?
With 80 active partners across 400 cities, Indifi has disbursed more than 100k loans to deserving companies. Securing a business loan is not always an easy task. Here are some tips to improve your chances when you apply for business loan.
- Improve Your Credit Score
- Explore Options:
- Show Financial Stability:
- Offer Collateral:
- Choose Business Loan for Women
While the creditworthiness of your business is important, your credit score also plays a key role in an unsecured business loan approval. If you have a poor credit history, start by repaying your debts and resolving any outstanding credit disputes to improve it.
Consult multiple lenders to compare loan terms and conditions for the best fit. Thoroughly completing your loan application and submitting all necessary documentation on time also increases the likelihood of approval, improving your chances of a successful loan application.
A company in stable financial health has a better chance of securing an NBFC business loan than a company running in losses. Prepare accurate financial and cash flow statements to show your business’s true financial position with income records and plans to improve revenue.
Instead of opting for a business loan without collateral, you can offer collateral like a personal asset or a business property that will act as a security for the lender. Depending on your business, some common examples of collateral can be inventory, real estate, equipment, and accounts receivable. To satisfy the lender's requirements, choose collateral with easy liquidity and a steady value.
Several lenders provide a business loan for women, frequently with reduced interest rates or adjustable payback periods. By using these specialized loan alternatives, you can increase your chances of getting approved for a business loan.
Create a detailed plan for loan repayment using loan EMI calculator. This instils trust in the creditor and increases the chance of your loan approval.
