Entrepreneurship has become a key driver of growth for the Indian economy. Being the 3rd largest start-up ecosystem in the world, this sector is anticipated to contribute significantly to India’s economy in the coming years.
Nonetheless, one needs funds to start a business and run it successfully. Moreover, a start-up requires substantial working capital to ensure a smooth flow of business operations. Whether it is purchasing new equipment, hiring an additional workforce or adding inventory, businesses need financing to work and attain growth. One of the ways to support this growth is through a business loan.
Read further to understand how a business loan can help prospective entrepreneurs achieve their goals.
Benefits of taking a business loan
A business credit helps individuals achieve the funding goals of their businesses. In addition, it provides the following benefits:
- Ease of availability
Upon recognising a business opportunity, prospective entrepreneurs need to execute their responses quickly. That said, raising funds through venture capitalists and angel investors can take time.
On the other hand, a business credit provides the required funds in a matter of days. Further, the process has become even more straightforward and convenient with the introduction of online applications.
- Helps manage working capital
Before starting a business, one must know how working capital helps a business stay agile. By fueling the working capital, a start-up can easily grab new market opportunities, evolve through new technological advancements, and meet the company’s day-to-day expenses.
A business loan can help organisations achieve these requirements by funding their working capital needs. In addition, such a credit option can also help maintain the business’s cash flow during difficult times.
- Flexible repayments
Business loans are collateral free loans. Further, business owners can apply for different types of financing as per their requirements. One can avail of a long term or a short term credit, both of which differ as per the loan amount and repayment tenor.
Moreover, borrowers can select a loan tenor with this credit option as per the business efficacy. Further, the payments towards monthly instalments can also be altered as per business profitability. The benefit of repayment flexibility makes business loans one of the most sought after credit options for funding various monetary needs of a business.
- Affordable terms and pre-approved offers
Business loans can help one become a successful small business owner by levying affordable loan terms and competitive interest rates. The interest rate depends on the loan tenor, borrower’s creditworthiness, income, etc. Thus, by raising one’s credit score and boosting business profitability, he/she can avail of financing at a competitive interest rate.
Moreover, many financial institutions offer this credit option at nominal processing fees and additional charges. Thus, borrowers can save substantially on their lending costs.
In addition, leading NBFCs across the country like Bajaj Finserv also extend pre-approved offers to simplify the loan application procedure. These offers are available on other financial products like personal loans, credit cards, etc. Individuals can check their pre-approved offers by entering a few details, such as their names and contact details.
- Assists in boosting a business’s visibility
Short term business loans are an effective way to build a business brand. Since this financial product has no end-use restrictions, one can utilise it to invest in the marketing of products. Resultantly, the visibility of a business and its operations will increase, attracting more customers.
Alongside knowing the advantages of this financial product, one needs to know the process of applying for this financial product.
Steps to apply for a business loan
Here are the simple steps to apply for a business loan online:
Step 1: Visit the preferred lender’s website
Step 2: Locate the business loan tab
Step 3: Open the application form and fill it up with the necessary personal and business details
Step 4: Following initial approval, upload the necessary documents
Step 5: Follow up with the representative for further process
Besides knowing these steps, it is also crucial to know what information one needs to apply for a business loan. Additionally, being aware of the eligibility and documentation can help one experience a streamlined application process.
Evidently, a business loan comes with a host of benefits. Meanwhile, business owners must conduct due diligence and evaluate their requirements before making a borrowing decision.