Beneficial Insights of Business Loan that You Need to Know

Business loan is availed for financing variety of business needs such as business expansion, purchase of inventory, buying equipment, working capital expenses, etc. You can avail it for a period of up to 5 years.

In India, the process of getting a business loan is quite simple if your business is legal one and you have the necessary documents required by the lenders.

You can get business loans from banks and non banking financial institutes in India. Banks follow similar process of providing personal loans and business loans. In India, interest rate on Business loan ranges between 12% and 20%. There are different banks and NBFCs which charge different interest rate for business loans.

Your credit history plays a major part in it. Further, time in business also plays an important role in getting business loan. The longer a business has been in existence the more is the probability of getting a loan.

Suggested reading Reasons of Availing Business Loan that Every Businessman Needs to Know

Be Prepared Before Opting for a Business Loan from the Bank or NBFC

Before opting for a business loan from the bank or NBFC, you must be ready with following:

• You must estimate well as to how much loan your business needs
• You should be very clear about the reason while explaining why you want a business loan
• Be prepared with all the required documents for getting business loan
• Plan properly regarding repayment of business loan

Given below are the beneficial insights of business loan that you need to know:

Flexible Business Loans

There are various kinds of loans offered by the financial institutions to suit the needs of different types of business owners. There are available for short, medium and long term.

You can get the details of all such types of flexible business loans and then decide as to which type of loan will suit your current needs of fund and then opt for that loan.

Further, there are two types of loans which are offered to the customers which are secured and unsecured. Being safer, secured business loan comes at a lower interest rate in comparison to an unsecured business loan.

See Also Step By Step Process of getting a Business Loan

Several Options for Loan Repayment

Lenders also feel that one should repay the loan with ease and this is the reason why they usually offer variety of repayment options to give you a comfort.

You can pay through EMIs, you can increase your EMIs gradually with time, you can part-pay or prepay the loan or you are free to reduce your EMIs.

Competitive Interest Rates

Business loans are offered at very competitive and affordable interest rates. You can also negotiate the same if your business has been performing well and generating good cash flows.

You must know here that rate of interest of business loan is decided considering some important factors like Loan Amount, Business Performance, Assets Owned by the Business, Collateral (security that is pledged with the lender to avail loan) and Credit Worthiness.

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