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.
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Businesses can replace outdated machinery in two ways.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.
