Any business, be it small or large, always needs funding for its survival and growth. And as a business owner, you often find yourself looking for the best ways to support your business’s needs. These needs vary from business to business and can range from purchasing goods and equipment and from paying employees to renting a factory or a place to buy or budgeting to meet the basic operating needs. Before applying it is important to check that all the business loan documents are in place.
However, to meet these needs, there are various types of business support available in India, and to be a business owner, you need to choose the one that best suits your needs.
Here are some of the business support options you can get in 2021 !!
This is one of the most common business options available in India and comes in both safe and unprotected forms. However, a loan works in the same way as any other loan, and the amount of the loan depends on the business and credit history of the business owner. Business term loans can be taken for a specific purpose that you need to tell the lender at the time of the loan. The repayment period is fixed and usually ranges from 1 to 5 years in the event of an unsecured term loan, up to 15 years of secured business loans. For these loans, the amount of the loan is deducted from the amount required to be repaid by monthly EMIs. There are a variety of lenders offering business term loans, so you get many options to choose from.
The credit line works like a credit card and offers great flexibility. The best part is – you can borrow at any time according to your needs without having to go through a long process.
Let’s make it clear – if you apply for a business credit line and get an account opened with them, this account will have a higher financial limit for you. You are now free to borrow money at any time, anywhere from that authorized loan. Interest charged is on the amount spent and not on the total amount authorized. Payment is easy and can be done by EMIs. If you use the full approved amount, you are eligible to use it again only if you pay the full amount borrowed. So, this can be a great way to meet the needs of your business.
Functional finance loans provide general cash flow financing for businesses that help them survive in difficult times. Loans come inconsistent and therefore have lower interest rates than other business loans. However, the loan works the same as the credit line, and so interest is charged only on the amount spent and not on the total amount allowed. However, you have limited usage limits here. The bank limits the use of a credit facility to a business. Therefore, before you can get a loan approved, you need to have an app to use the loan amount. This also helps you to run your business in an orderly manner that continues to generate more revenue.
An asset loan
Borrowing property for your business is one of the easiest options available. This is also a good choice if you do not have a good business credit history or a bad credit rating. This is because, in such cases, it is difficult for the lender to trust you to pay on time. So providing them with collateral where they can get their money gives them a guarantee of borrowing.
However, for these loans, the amount of the approved loan depends on the value of the mortgage and typically ranges from 70-80% of the value of the property. The interest rate on this loan is relatively lower than other options/business loans. However, the title deed to the property must be clean and undamaged. Loan assets should also be free of liabilities. The lease of this loan ranges from 15 to 20 years.
This is also a type of business loan available only to self-employed professionals such as doctors, hired accountants, lawyers, etc. If your loan amount is more than 10 -15 lakhs, you usually need some form of collateral or loan to be accepted on this loan. Your national savings certificates, government bonds, term deposits, and life insurance policies can serve as collateral to approve these loans. An expert can use this loan to start/expand his / her business/business.