Small business owners often get in a situation where they require an additional funding source for their business. And in situations like this, small business loans are the saviour for them. There are many lenders in India that offer loans for business at the best interest rates. In addition to providing additional funds, there are other benefits as well as availing loans. In this write-up, we will discuss the benefits of small business loans in India.
So What Are The Various Benefits Of Availing Small Business Loans?
It is a universal truth that no business owner whether small or big can have enough cash for the business. No matter how many years the business is in operation, the business owner faces a paucity of funds at this or the other time. This does not necessarily mean that the business is not running successfully. But due to cyclical fluctuations, the business owner sometimes does not have enough working capital or liquid cash.
In such situations, he tries to cut on expenses and scale down operations in order to sail easily through the period. But in the present day of cutthroat competition, this can risk him to lose his customers to the competitors. Well, there is no need to let this situation hit the business when there is an option of availing small business loans.
The presence of various financial institutions such as NBFCs and online lenders in the market has made availing small business loans in India convenient and easy. They have a transparent system of working and have a unique product offering that has made them become the preferred choice of borrowing among small business owners in the time.
About Online Lenders
Online lending institutions such as NBFCs offer small business loans in India online through their website. The online lenders offer a wide range of business loan products to meet different and particular requirements of the small businesses. The businessman can easily log on to visit their website and access all crucial information related to their products, such as small business loan interest rate, loan eligibility criteria, etc. Information like repayment tenor, interest rates, terms and conditions, etc. can also be acquired. With all this information at disposal, a sound and informed decision can be taken.
Online lending institutes follow a flexible and basic loan eligibility criteria wherein the loan application will be approved within a few days. The online lenders check the CIBIL score and other financial aspects of the business. They also offer loans at basic eligibility criteria and minimal documentation. They offer an online loan application and approve it within a few working days. Once the loan application is approved, they disburse the sanctioned loan amount within 3 days.
The online lenders offer unsecured business loans and their usual loan ticket window is INR 1-5 lakhs. The small business owner can repay the loan in a flexible repayment tenure ranging from 6 months to 24 months. This will help them in meeting their business liabilities in a timely manner and take their business towards growth.
To apply for a small business loan, the business owner has to visit the website of the lender. Fill up the business loan application and upload the soft copies of the documents, such as financial and KYC documents. For the convenience of the business owner, the online lenders also offer doorstep facility to collect documents.
What are the Benefits of Small Business Loans?
Gone are the days when small business loans were considered bad by business owners in India. In this current business era, business owners maintain a competitive advantage by all means. And to stand tall in the time of competition, financial institutions offer a great opportunity to help small business owners. They offer small business loans online that help business to finance their operations without stressing working capital.
Let’s take a look at some advantages of loans for small businesses:
Instead of borrowing money from private lenders who charge high-interest rate and lump-sum payments, the business owners can borrow money from NBFCs and online lenders who allow repaying loans in easy monthly instalments. However, the interest charged on the loan and paid in the EMI is considered an expense. So, this reduces the tax liability.
Availing a loan for business offers the much-needed financial flexibility to the business owner. The money borrowed under business loan can be used as per the discretion of the borrower. And there is no need to inform the loan lending institution about the end use of the funds. However, funds must only be used for business-related activities, such as for capital investment, payment of wages and bills, etc.
Supplementing Financial Strength
Small business loans help in reducing the stress on working capital and supplements the financial strength of the business. It further helps in strengthening the financial condition of the business. Also, through the payment of loan through EMIs, the loans can be paid conveniently.
There is no need to repay the business loan in a lump-sum amount. The loan can be repaid through EMIs as per the mutually agreed schedule. In addition, if the business owner has enough funds to repay the loan in one go, he can foreclose the loan account without incurring any penalty.
Small business loans in India are the ideal option to build a credit history. Paying EMIs towards the loan account will help in improving the CIBIL score. This would certainly be helpful in building a good credit history and help in securing higher loan amounts in the future.
With so many benefits of small business loans for business owners, they are the best option to fast track the growth and expansion of the business.