Many startups and businesses start with little capital and big dreams. Thankfully, there is a facility called a business loan that can help you achieve your dream quickly. Be it getting more equipment, increasing the level of inventory, or any other business objective, a business loan can help you in achieving your business goals with ease.
A business loan is particularly helpful for a small and medium business owner that can expand the wings of business with help of additional financing available. SMEs are a key element in any economy due to the number of direct and indirect jobs they create. For the Indian economy, SMEs are the backbone of the massive economic growth the country is witnessing today. Although the COVID-19 crisis has been a shocker for the SME sector in particular, with the opening up of the economy, experts believe that the SME sector will witness a lot of activity for economic growth and expansion.
It is expected that many small, medium and large companies will opt for a business loan in the coming times. However, with the interest rates touching all-time low and every other business you know opting for a loan, it is important to know when is the right time to go for a business loan.
Gone are the days when taking a loan was looked down upon and there was a threat of interest and other hidden costs that would sink your ship. Today, with tight regulation and transparent, trustworthy lenders like Poonawalla Fincorp, you can be assured that a business loan will only help you to grow further.
Here is all you need to know about business loans including the best time to take a business loan:
What is Business Loan?
A business loan is a mode of sourcing additional financing to meet your business goals. With the help of knowledge, you can expand your business, buy machinery or even boost production and gain good returns quickly.
The business loan, like any other loan, comes with anattractive interest rate which you have to pay depending upon the lender you choose.A business loan is a type of external finance that a company can use to fund its operations.
A business loan can also help an entrepreneur start a new business or purchase an existing one.
Interest rates on business loans are often higher than other types of financing like a home loan or loan against property. However, it is a collateral-free loan that is provided by the lender based on the past performance of the business and the credit profile of the founder directors. Hence it is much more efficient as compared to the other loan categories to expand a business.
Bank can quickly provide you with a business loan, so you don't have to worry about a lack of funds. Some lenders like Poonawalla Fincorp offer a new business loan up to Rs. 30 lakh with quick processing, minimal documentation, and zero hidden charges.
One of the major benefits of a business loan is that you don't have to hustle a lot or do a lot of paperwork to get the loan approved. You can also get doorstep services from several lenders.
You can choose the tenure for your business loan. If you require a loan for the short term to meet your machinery expenses, you can take a loan just for a year. If you want to take out a loan for a longer time, like 2-5 years, you can choose accordingly in consultation with your lender.
Importance of taking a business loan at a suitable time
A business loan helps you bring the funds for your business without harming the fundamentals and long-term strategy of the business. For companies, financing is an engine that also drives business growth.
Here are some of the reasons why it is important to take a business loan at the right time:
When is the right time to take a business loan?
When you are taking a business loan, always remember that it is a big financial commitment to expand your business. If you are thinking about taking a business loan, you should be clear about the reasons for the same.
The right time to take a business loan is when the company needs it the most. This is typically when they have been told their funding from other sources is not available. It also helps to prove what they plan to spend this borrowed money on and then pay it back with interest.
Taking a business loan is a great decision to go forward and build your business. It's important to know when the right time is to take one so you can make the most of it.
There could be several reasons to take a loan. A business may need a loan for an immediate cash flow problem. Some businesses might also need a loan to grow and enter into new competitive markets. These types of loans may include acquiring fixed assets for your company, building an office space, or buying new equipment.
There are many reasons why an entrepreneur might want to take a business loan. The right time to take a business loan depends on the specific needs of the business. Some of the scenarios in which you can take a business loan are as follows:
It has been seen that companies that shy away from taking a business loan have to sacrifice their growth curve and settle for less. However, in today’s day and age when you have multiple sources of financing available to meet your goals, you should opt for a business loan and continue your growth run.
To succeed with your application for a business loan, it’s essential to understand some basics about them first. It is also important to know the loan amount you would require. These would be the right steps towards finding the right lender and applying at the right time.
You can always get in touch with us at Poonawalla Fincorp for your business loan requirements. If you are looking at a partner that offers a collateral-free loan with instant approval, and zero hidden charges, you should apply for a business loan with Poonawalla Fincorp today.
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