Every business owner needs a certain amount of money to start their own business. The entrepreneur on the threshold of starting a new venture has to work out where and how he will get access to sufficient funds. The very first name come in one’s mind about funds is a bank. Banks are one of the first organizations to be approached for funds in the form of many loans like Business Loan, Home Loan, Personal Loan and others .
It is difficult to get a bank loan to finance a small business venture. For every successful loan application, there are many that get rejected. But today banks are realizing the phenomenal potential of small businesses and undergoing a gradual change of advancement. By this, we mean one of the first organizations to be approached for funds in the form of a loan.
One of the various options available for small businesses to raise funds is bank loans. The final decision about where to secure funds depends on the balance between the pros and cons of the source. Like all other funding sources, bank loans also come with their share of advantages and disadvantages.
Here are 5 benefits of Business Loans:
- Accessible and Convenient
As per convenience promoters offers different repayment options. They may work out a repayment plan as per the business cash flows to avoid facing financial difficulties while servicing the loan. Monthly installment can be lower or increased by owners as per the profitability or choose bullet payments to periodically repay the amount.
Different types of loans can be availed by owners depending on their fund requirement. Many companies can choose term loans to meet the fund requirements in the short to long-term. They may choose for working capital loans to meet the operational expenses of the business. An overdraft facility whereby promoters may overdraw the current accounts as per the agreed terms and conditions. The flexibility makes it easier for promoters to avail a loan for the business facility.
- No Collateral Required–
No income or collateral documents need to submit to avail the loan. A property or land must be owned by the borrower for a 100% loan disbursement. For a small business start-up, these loans help to meet their business requirements and sustain the progress. So, no document, or no credit score to maintain throughout.
- Short-term option–
Businesses which look for their fund requirements can opt for this loan, this meets their requirements to fill a short-term financial gap. In addition, there are flexible loan options depending on the size of the business like 100% disbursement, 70% payout (if shown company tax return) etc. This makes easier for businessmen to expand their business and to sustain the cash flow.
- Competitive Interest Rates
Not only banks, certain NBFCs, and other lending companies can also offer business loans at competitive interest rates. Capital Float, for instance, provides a business loan to small and medium businesses in India at very competitive interest rates, nominal processing fees, with absolutely no hidden charges. These features make Finbucket some of the most preferred lenders in the present small business loan market.
While raising funds is an essential part of business, so too is budgeting and having someone in the business with a keen eye on keep costs under control and within budget. Anyone in business can reaps the rewards from financial education and professional advice. Grow your business with smarter business loan.