Benefits of Business Loan

How Business Loans Take Your Business Higher?

March 22, 2022 • 4202 views

Businesses, big or small, often procure loans from financial institutions at different points in time. These business expansion loans provide enterprises with the much-needed liquidity to address operational expenses and help them sail through a cash crunch. However, there are many ways through which you use this loan to take your venture to the next level. If you are wondering how to do so, read on. 

Business Loan for Business Expansion

A Business Loan is one of the most common ways to borrow funds for your company. In comparison to share capital, a Business Loan is a preferable source of financing for a prosperous corporation because it allows for greater leverage. You benefit from a higher rate of return than the interest you pay on your borrowings.  
Every business aspires to expand, both in terms of volume and offerings. However, expansion is easier said than done, and its success depends a lot on the availability of funds. Buying or renting new facilities, purchasing equipment, launching marketing campaigns, and so on are all expenses that an organization must consider during the expansion process. 
All of these require a considerable investment upfront, and this is where a Business Loan provides the required funds. One of the significant benefits of a business expansion loan is that it doesn’t require pledging collateral. It means you don’t need to pledge any security to the lender. Upon completing the formalities, you get the loan amount straight into your account within a few days. 
uses of business loan

Buy/Lease Modern Equipment

The success of any business hinges largely on the equipment it deploys. Like everything, equipment becomes obsolete, calling for its replacement. Your productivity will most likely suffer if you use old and worn-out tools and equipment. Additionally, it will give the perception that customer-facing businesses are untrustworthy. Businesses can replace outdated machinery in two ways. They have the option of purchasing a new one or leasing one. Regardless of the method used, it necessitates a significant outlay of time and money. 
A Business Loan provides your venture with the required money to buy or lease new equipment. This has a direct impact on operations, having a positive influence on revenues. At the same time, it gives you a competitive advantage over your competitors in the market and significantly improves the efficiency of your employees. 

Deploy New Technology

Modern businesses are technology-intensive. If you want to compete on a larger scale, you must deploy the latest technology in your venture. A minor investment in business technology systems can have a big impact on your company's growth. However, it comes at a cost that may range from a few rupees to l to even crores. An unsecured Business Loan provides you the liquidity to plan and deploy new technology into your business and take it to greater heights. 
It also helps you conduct technology audits, find out the loopholes and plug the gaps. In a nutshell, with the help of a Business Loan, you can instill state-of-the-art technology into your business and compete with the very best in the industry.  

Working Capital Requirements

You may need a loan to cover regular expenses like salary, electricity bills, raw materials, and supplies. The operating activities should not be halted due to a lack of cash. As a result, funding these efforts will allow you to keep your business operations on track. Working capital may be required due to the addition of manufacturing units, a longer operational cycle, or a market boom.  

Encash on a Market Opportunity

Successful businesses are those which encash the opportunities presented by markets from time to time. Often announcements from government and regulatory authorities provide opportunities to enterprises, capturing which help bolster revenues. 
For instance, subsidy on registration of commercial spaces or entering a joint venture with a PSU in the same domain can help you save on business expansion costs and leverage the expertise of the other party. In such a scenario, paucity of funds can be a roadblock. However, a Business Loan can help you clear the hurdle and get going. 

How to Apply for a Business Loan?

Applying for a Business Loan, particularly for small and medium-sized firms, can be a little challenging. It takes time and effort on the part of business owners and promoters. However, you can easily receive a Business Loan in India if you follow a methodical approach and prepare a well-written Business Loan application.  

Nonetheless, now that you know the latent benefits of an unsecured Business Loan, the question is how to apply for a Business Loan? It’s easy. Today, almost all lenders have the provision for online applications. Fill up the form, upload the documents required for a Business Loan, and you are done.
 
While opting for a loan for business growth, do compare lenders on different parameters such as rate of interest, prepayment charges, and penalties, among others, and choose the one that best suits your requirements. An analysis of different types of Business Loans will help you seal the best deal. 

A business expansion loan is a great approach to cover any type of unanticipated expenses. Poonawalla Fincorp offers Business Loans at a competitive rate of interest with easy documentation. Get in touch with our executives today to know more.

What Collateral Do You Require?

Most Business Loans offered by financial institutions in India are collateral-free, which means it does not require you to provide any asset as security to avail of the loan. Moreover, some Non-Banking Financial Companies (NBFCs) like Poonawalla Fincorp offer collateral-free Business Loans at attractive interest rates and flexible repayment terms to help you fulfil your business goals without any hassle.

FAQs

  • Do Business Loans have tax benefits?

Yes, the interest amount of a Business Loan is tax deductible. It is important to note that only the interest amount is exempt from taxes; the principal loan amount is not tax deductible.

  • Can Business Loans be taken only for a specific purpose?

Business Loans from Poonawalla Fincorp can be used for almost any end purpose. Be it to boost working capital, invest in business growth or expansion, or upgrade infrastructure, Business Loans can fulfil any financial requirement of your business.

  • Can a Business Loan be availed of to repay other existing loans?

Yes, you can avail of a Business Loan to consolidate any existing high-interest business debts. Doing so also allows you to repay your debts in a more organized manner.

Disclaimer

We take utmost care to provide information based on internal data and reliable sources. However, this article and associated web pages provide generic information for reference purposes only. Readers must make an informed decision by reviewing the products offered and the terms and conditions. Business Loan disbursal is at the sole discretion of Poonawalla Fincorp.
*Terms and Conditions apply

poonawalla fincorp team

Poonawalla Fincorp Team

We are a team of expert writers and editors passionate about providing our readers with authentic and valuable information on finance. Our aim is to simplify financial and finance-related concepts. We strive to help our readers become more aware and empowered to make informed financial decisions.

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