Six Reasons why Business Loans are very beneficial
Most Businesses from time to time need external funds to maintain the cash flow. They require a substantial amount of funds to meet their working capital requirements and ensure smooth business operation. Whether it is for meeting working capital expenses, expansion purposes, or maintaining cash flow, business loans can serve various purposes.
The good news is that market is chock-full of business loan lenders. People running a business can borrow funds from banks, Non-Banking Financial Corporations, Crowd Funding, or even through Venture Capitalists. In this post, we will discuss in detail how a business loan could be immensely beneficial for people running a business.
Working Capital Requirements
Business Loans help a long way in meeting working capital requirements and expansion purposes. Moreover, they help in maintaining a cash flow. It’s not always possible to look at the sunny side and relax while running a business. If anything, these two years of pandemic induced lockdowns illustrated, it’s the need for companies to have surplus funds in their hands. Companies must remain financially strong during lean periods.
Affordable Interest rates
Banks and NBFCs provide business loans at completive interest rates amidst tight competition. Interest rates depend on many factors like the tenure of the loan and the borrower’s creditworthiness.
Moreover, many NBFCs provide business loans at a minimal processing fee and zero foreclosure charges. So, the borrowers can save a lot from the reduced processing fee and very affordable interest rates.
The most beneficial aspect of a business loan is its flexibility. Business Loans are available in two modes – Short Term and Long Term. Business owners can take either of these loans based on their requirements. Usually, short term business loan comes with tenure of one year, and long term loans come with five years or more, depending on the lender profile.
Business Loans from Non-banking Financial Companies are generally collateral-free. It makes it easier for the business owners to avail the loan and go full throttle while expanding/managing their operations without any financial worries.
Easy Repayment Options
Business Loans come with convenient repayment options. There are provisions to increase or decrease your EMIs on your business loans based on your profitability. With multiple payment methods available these days, borrowers can repay their monthly installments in a few minutes. For example, you can sign up for an auto-debit feature from your current account, in which case the funds will be transferred through EFT (Electronic Fund Transfer) automatically.
Improves your chances for Future Loans
If you maintain a good track record in repaying your business loans, it enhances the credibility of your business in the eyes of the lender. Thus, you can negotiate for large-scale financing at better interest rates in the future if you have any expansion plans.
The Fincover Advantage for Business Loans
Business Loans comes with a host of benefits. It’s up to the borrowers to carefully evaluate their requirements and financial position before choosing the right loan. Fincover is the one-stop destination of all kinds of loans. We have tie-ups with India’s leading banks and NBFCs. Our algorithm connects borrowers with suitable lenders by filtering the requirements and providing the most relevant quotes to their needs