Small and Medium Businesses (SMBs) are the backbone of our country. However, many of them suffer due to a lack of funds to keep them afloat or help them expand their operations. Reports suggest that up to 70% of SMBs go out of business in the first few years of their existence due to inadequate funding. Fortunately, a business loan can come to their rescue and give them the capital they require. A business loan can give you the impetus and the edge you need to not just start your own business but stay ahead of the competition. Before we see the use-cases where a business loan can be useful, let us examine some of its key features and benefits.
Features of Business Loan
- High Loan Limits – As a business owner your funding needs can vary as per the nature of your enterprise and the stage it is in. For example, setting up a business or the cost of acquiring a new one can be high. Loans from reputed lenders such as the Lendingkart business loan allow you to borrow amounts in the wide range of ₹50,000 to ₹2 Crore.
- Fast Processing and Quick Disbursals – In business, a lot depends on speed and swiftness of action. This is why you need a quick loan disbursal to back your decisions. Traditional loans can take several days to get approved and more days to come into your account. But internet-based platforms are almost instant in this regard. A Lendingkart business loan, for instance, is entirely digital, and paperless, and can result in same-day approvals. Furthermore, the actual loan disbursal can happen in just under 3 working days.
- Attractive Rates and Low Costs – Before you apply for a business loan you must compare the rates offered by different lenders. You must also carefully examine ‘other’ costs and charges that can inflate your repayment amount. The top lending institutions are transparent in their dealings and a Lendingkart business loan comes with no additional charges whatsoever barring a one-time processing fee of 2-3%.
- Flexible Repayment Terms – Repaying the loan can cause a strain on your finances. But not repaying it on time is highly detrimental to your credit score. Flexibility in repayment is a highly desirable feature. Lendingkart business loan EMIs are the benchmark in convenience as you can pay them on a monthly or even bi-weekly basis, as per your business’ sales cycle.
- Extended Tenor – If for some unforeseen reason your finances get stretched and you realise you may not be able to repay the loan as per the agreed-upon tenor, then some lenders offer you a grace period to ease the strain. Lendingkart business loans, for example, can give you an additional 6 months for resolving your financial issues.
4 Smart Reasons to Get a Business Loan
Now that you can know the key features and advantages of a business loan, here’s how you can use them to your advantage:
- Starting an Enterprise – Setting up a new business requires a viable business plan, thorough research of the market and target audience, and a team of experienced individuals to run and support the operations. Market research-related activities (whether done in-house or outsourced), and hiring of staff costs money. A business loan can help you fund these tasks without having to compromise on quality due to cost implications.
- Buying Equipment and/or Inventory – Another vital aspect of starting out is buying the equipment to support your business and the inventory to generate sales. You can opt for a secured loan under which the equipment you purchase stays in the name of the lender until it is fully paid for. Or, you can choose an unsecured Lendingkart business loan that does not require any collateral from your side in exchange for the loan amount. Do ensure to do your calculations thoroughly while estimating the cost of equipment and goods before applying for a loan so that you don’t over or under-borrow.
- Funding a Marketing Campaign – Once your business is firmly standing on its feet, you may feel the need to reach out to newer customer segments or generate a buzz for your brand. These specialist activities like PR campaigns, advertising, social media, and SEO marketing can be expensive but rewarding. A business loan with its flexible terms allows you to fund these activities and repay when the benefits start reflecting in your sales.
- Paying Off Debts – All successful businesses borrow money, and many times the debts can start piling up. This can get quite stressful. Moreover, the cost of not paying your loans on time is a poor credit score which can take years to rebuild and makes it harder for you to avail of credit products in the future.
You can use a business loan to consolidate your debt and pay them off. A loan with an attractive interest rate like the Lendingkart business loan will help you settle your ongoing loans easily. Not only do you pay less interest but now you will just have one EMI to manage and track regularly.
There are several banks and NBFCs offering business loans to serve the various needs of your enterprise. Before you make your decision it is prudent to understand their respective costs, interest rates, and other terms and conditions. Using helpful tools such a business loan EMI calculator you can fairly estimate your monthly instalments, compare among lenders, and make a more objective decision.