Opting to take a business loan is a good way to keep your business afloat. It is common for businesses to go through hurdles at some point or another. Lockdowns have only enhanced this. A business loan can give relief quickly as this is a loan you get online, with rapid approval.
A Business Loan Explained
A business loan is an unsecured loan you can take to finance any business expenses. Many kinds of business loans exist for many business purposes, but generally, they are used for either starting a new business or meeting expenses of an existing business. For instance, a type of business loan you get is called an MSME loan (Ministry of Micro, Small and Medium Enterprises). Such loans serve the purpose of enhancing your business either through an improvement in infrastructure, equipment, raw materials, paying staff, etc. Additionally, with the benefit of extra cash to keep your business alive, you get other advantages of this loan. Nonetheless, there are disadvantages too.
Advantages of a Business Loan
Taking a business loan from Finserv MARKETS can aid your business or help you start one, in a myriad ways. Advantages of a business loan are found in its benefits/features. Here are some to consider:
- No Collateral – A business loan requires no collateral and is therefore an unsecured loan.
- Good Loan Amount – A maximum loan amount of Rs.20 lakhs is approved.
- Quick and Easy – You get to apply online, getting approval in 2 minutes, and funds in your bank account within 24 hours.
- Versatile Loan Tenure – With flexible loan repayment options, you can choose your tenure of up to 5 years. Additionally, you get the choice of a hybrid repayment, paying interest only on the amount utilized.
- Loan Based on Needs – You can use a business loan, regardless of whether it is an MSME loan or otherwise, for any business funding, from paying salaries to office renovation.
Disadvantages of a Business Loan
In spite of a business loan offering you many advantages, there are drawbacks too, listed below:
- Tough to Be Eligible – To qualify for business loan approval, you need to fulfil criteria such as having existing business experience of 3 years, age between 25-65 years, annual income of Rs.1.5 lakhs, etc. If you don’t meet any one of these, your loan application could be rejected.
- High Credit Score Requirement – Some banks and NBFCs need you to show good creditworthiness with a credit score of 700 and above.
- Loan Amount Rejection – Although you may not face loan approval rejection, you may not get the loan amount you have requested, compelling you to settle for less. This commonly occurs in the event you don’t meet the full eligibility criteria set forth.
- Debt Collection – You may take a business loan with the best intentions of paying it back in a timely manner. However, factors beyond your control, like poor market conditions, etc, may prevent this and you can accumulate debt.
Final Views
A business needs a boost at certain times and a business loan is a respite. However, you must manage your loan well. Finserv MARKETS is a place you can go to for the best loan and be prepared in advance with a wealth of information.