Business enterprises are prone to facing hindrance due to inadequate working capital or funds. It slows down the flow of operations, or could even lead to a huge loss or breakdown of a company.
External financial assistance can help rescue a business enterprise in such troublesome situations.
However, acquiring secures advances (loans which demand collateral in the form of a house or any other property) is not easy when a company is already going through a financial shortage. This is where unsecured advances come into play.
Unsecured advances such as business loans do not require collateral against the sum disbursed. An entrepreneur is free from having to pledge the property to avail a loan. This particular feature of a business loan saves an entrepreneur from pledging personal assets for business purposes.
Generally, such loans are untilled for purposes such as –
- Renovation of the office or business premises.
- Upgrade technology.
- Maintaining inventory.
- Hiring and paying employees.
- Increasing cash flow.
- Purchasing or repairing machinery.
- Expanding the business.
Apart from this, there are several other pros of a business loan, which is why it has succeeded over the years in the market.
Exclusive features of business loans
Loans availed for business purposes have gained immense popularity over the past few years. One of the primary reasons behind this is that entrepreneurs now realize why business loans are financially beneficial for a company and simple to avail.
The exclusive features which have contributed to the growing popularity of these loans are –
- Affordable funds –
Short-term or intermediate loans for business are ideal to meet varied financial requirements in business operations.
You must look for lenders offering such loans at minimum interest rates so that you can repay it easily within the stipulated time.
- Substantial sum –
Top lenders like to offer business loans of up to Rs.30 lakh. You can borrow an amount according to your requirements.
Once you avail the funds for the business, you can employ it to purchase equipment, expand operations or invest elsewhere with an aim to increase revenue.
If the investments generate more revenue than the loan interest liabilities, the business has successfully utilised the loan amount.
- Flexible repayment facility –
With Flexi Loans offered by Bajaj Finserv, an entrepreneur has the option to withdraw only the amount required from the sanctioned loan. Interest is charged only on the amount withdrawn from the total loan sum.
The borrower can repay the loan by paying only the interest as EMIs for the initial part of the tenor and the principal amount once the tenor ends.
- Online facilities –
Before opting for the loan, you can calculate EMIs by using the business loan EMI calculator online.
It helps the borrowers get a clear idea of how much their EMIs, total cost of the loan plus other details help them plan their finances better.
Documents required to apply for a business loan
Business loan documents which the lenders might ask you to submit are as follows –
- KYC documents such as voter identity card, Aadhaar card, passport, driving license, PAN card, and so on.
- Certificate proving the existence of a business.
- Bank account statement of the preceding month.
- Passport-size photographs.
- Other financial documents as deemed necessary by a lender.
If you are looking for funds and ways to boost your slow-moving business, avail a business loan and use the funds wisely. Make sure to read the terms and conditions in details before applying for the loan.
An entrepreneur also needs to assess the fund requirements of the company thoroughly, so that he knows precisely how much to borrow.