This includes a security of your asset like your home or business to the bank or any financial institute from where you will borrow the loan. This loan is more beneficial as it has lower interest rates. In case you default the payments, then you will have to give your secured asset that you have offered to the bank as a security.
This loan is issued to the borrower on the basis of his credit score in the market. This type of loan does not require any kind of collateral asset to be given to the bank or any financial institution. Personal loan comes under this category that is based on the credit score of the borrower.
1) Starting Your Business: When you start any new business then, the first and foremost thing you require is funds. To buy the equipment, raw material, machinery, pay the wages and salaries of the employees, funds are required. Business loan allows you to take care of all these basic things with ease.
2) Expansion Of Your Business: When your business runs ahead, then you feel the need to expand the same for more profit. This requires more funds without affecting your existing business and smooth flow of the regular finances. Business loan can help you to expand your business without interrupting the usual flow of finance. You will be able to buy more resources and provide services to the customers easily.
3) Smooth Sailing Of Your Business: It is a process of the business that vendors demand the payment but due to some unforeseen circumstances the payment gets stuck and financial flow hampers due to this scenario. Business loan however comes to your rescue where you can easily pay the amount to the vendors without putting much strain either on the customers or on the vendors. It helps in smooth flow of money and you can easily pay the loan amount when you will get money from your regular resources.
1) The rate of interest remains fixed throughout the tenure of business loan. Sometimes, vendor may offer floating loans but that varies from the tenure of the loan.
2) The amount of the business loan depends upon the profile of the borrower. If the credit history is clean and good then it is easier to get higher amount at a lower rate of interest.
3) Even if the credit score is poor but the value of assets used in the business is higher than the loan amount, then the bank sanctions the loan easily. Normally, the repayment tenure of the loan is 1-5 years depending on the ability and nature of the business.
4) Business loan for start-ups is very easy to avail as it requires less paperwork and the whole procedure is hassle-free. It only requires the KYC details of the borrower.
1) Fill up an online form with all your personal details like your name, address, occupation and loan amount required.
2) Scan your documents and upload the copy online.
3) Wait for the bank or financial institute to verify your documents.
4) You will get a confirmation from the bank on your e-mail regarding approval of your business loan.