Benefits of small business loan

Most businesses start off in a small way. An individual owning a small restaurant may decide to open a new branch and in a few years may be an owner of a large chain of restaurants. However, it is not possible to expand any business using your own funds. Hence you will have no choice but to look for funds elsewhere.

Luckily, many NBFCs have the right product if you want to expand your business – a business loan. A business loan is a product developed by lenders especially to meet the needs of business owners. In the past few years, lenders have made it even easier for owners to avail such loans. So let’s look at the benefits of business loans and how they can make your life much easier.

Advantages of business loans

Business loans offer a lot of benefits to small, medium and large businesses.

1- You can borrow a significant amount of money for your business operations

A business loan with Shriram City Union Finance allows you to borrow money ranging from Rs. 1,00,000/- to Rs. 1,00,00,000/-. This is especially useful if you want to fund a major business project like expansion, technological upgrades or provision for new business facilities.

2- You have full control over the borrowed money

Business finance does not require you to sell a part of your business to investors to borrow money. Hence you can use the money however you want according to your business plans. You do not need to work in coordination with other people or take into consideration the opinion of others.

Your lender may ask for your business plan to understand how you plan to spend the money but they won’t take part in the decision making after giving you funds. As long as you repay the money with interest, nobody will question you regarding the money you borrowed.

3- You can increase your working capital

You can make use of the loan amount to increase your business’s working capital if you are facing a financial crisis. You can maintain your operating cash flow and meet the daily expenses without disturbing your emergency funds.

4- You won’t have to pledge your collateral

There are many NBFCs like Shriram City Union Finance that offer business financing that does not require collateral as long as you present a profitable business proposition. Big companies are also assessed on their cash flows, income and stability to ensure that the loan can be repaid within the agreed term.

5- Your business credit will improve

Taking a business loan improves your company’s creditworthiness. After regularly repaying the payments and completing your loan within the terms, your credit score will increase. This helps you easily get approved financing at lower rates and easier terms in future.

6- You do not have to share your business profits

Business loans help expand your business and fuel its growth for more profits and long term success. Once you achieve it, you do not need to share the profits with anyone. No matter how big or small profits you earn, you will have to repay the same amount and interest to the lender.

On the other hand, though investors may give you more than enough funds to grow your business, they are also active participants not just in the business decisions but also in the profits earned. The profit you share with them is directly proportional to how much your business is making.

7- You can easily access the funds

Instead of waiting for your business profits to grow for reinvesting them, it is a better idea to get refinancing from lenders. You do not have to wait for years to raise money from the various business projects whether it’s for new product development or buying new equipment.

8- The interest rate is usually low

Most lenders offer low interest rates on business loans to attract customers. While the lenders aim to get a healthy return, the huge competition in the lending business creates a favourable condition for borrowers to look for the best deals.

9- Fast and secure processing

Many lenders have set up an online portal that lets you apply for a business loan from the comfort of your home. You just need to fill in some details. Once done, the company’s executives get in touch with you to personally address your loan requirements.

While business loans can fulfill your business needs, it is important to carefully consider your long term business needs, plans and strategies. This will help you estimate the amount you have to borrow. Also, make sure that you repay the loan within the agreed terms as your business worthiness, assets, as well as creditworthiness, are at stake.

Shriram City Union Finance has a team of business loan experts that help business owners to get the funds they need to start their business or take the current business to a new level.

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