What are the basic requirements of any big and small business? It’s the working capital and efficient cash flow! As an entrepreneur, it is essential to connect with the funding platform as you can avail the facility of long term business loans to combat the financial crisis in your business.
Many NBFCs are emerging as a source of obtaining business loans without any collateral and minimum paperwork. They offer multiple avenues of credit for entrepreneurs. You can also take a personal loan for business.
7 Major Benefits of Business Loan
Check out the top 7 financial benefits of taking a business loan!
- Utilization of Funds for Branding & Marketing
The business money acquired via business loans can be utilized in any avenue of operations. But you get the maximum ROI (surpassing loan interest rates) through effective branding and marketing of your products and services.
You can go viral on social media, or you can create high-quality commercials. There’s so much that can be done in marketing with the money.
- Working Capital Management
Whether you want to hire new people or buy advanced machinery, you need working capital. One of the major benefits of a business loan is that you can infuse the gap in your working capital with the loan amount. Different banks in ny and financial institutions offer loans and grants that can help boost your business growth.
In this way, your expansion and new purchase orders don’t need to wait. Business loans provide you with financial stability in highly volatile market conditions.
- Choice of Tenor
There are various types of business loans on the block. Therefore you get flexibility and choice when it comes to the tenor of your loan. You can take a short-term loan for a small short-term requirement or a long-term credit for a significant expense.
If the tenor of a personal loan suits you, it can be taken to fulfil your business’s requirements.
- Comparatively Low Interest Rate
Usually, the interest rate of your loan depends upon your creditworthiness and loan tenor. However, your tribe of business owners get an advantage out of the competition between banks and emerging NBFCs.
The advantage is that NBFCs provide business loans at much lesser interest rates. They charge a nominal processing fee and don’t charge any pre-payment penalty. That makes their loan lucrative and profitable for small and medium scale businesses.
- Convenient Application Process
Another benefit of business loans for small and medium scale enterprises is that their application process is hassle-free and practical. You don’t need to create hundreds of documents and presentations to convince the lender.
Some primary documents of your business and business plan suffice the paperwork requirement for alternative financial institutes.
- Flexible Repayment Options
Financial institutes understand the challenges of modern businesses. Therefore they offer flexible repayment options. You can also get a customized credit plan according to your need and convenience. If required, you can pay more or less money than your EMIs in any month.
You can make use of EFT (Electronic Funds Transfer) to repay your loan through auto-debit services.
- Improvement in Your Business Credit
The more credit you take and repay on time personally, the higher your credit rating goes. Similarly, in business, you can increase the creditworthiness of your business by taking and repaying business loans.
Increased creditworthiness means more amount of loans available to you at lesser rates. It is incredible for your capital management. This is one of the most underrated benefits of a business loan.
It’s challenging to manage the operations and expansions without timely cash infusions. Business loans enable your organization to run at its regular pace and increase it in the season time. Also, the benefits of a business loan outrun its interest rates and charges. So next time when you are in a fix, apply for a business loan without any second thought!
Shiv Nanda is a financial analyst who currently lives in Bangalore (refusing to acknowledge the name change) and works with MoneyTap, India’s first app-based credit-line. Shiv is a true finance geek, and his friends love that. They always rely on him for advice on their investment choices, budgeting skills, personal financial matters and when they want to get a loan. He has made it his life’s mission to help and educate people on various financial topics, so email him your questions at firstname.lastname@example.org.