Business Loan

Reasons You Should Get A Business Loan For Expansion

In today’s age of constantly growing demand from customers, businesses need to keep their finances robust. Companies need a Business Loan to cater to all the demands and requirements of the business. Along with Business Loans, there are various financial sources and options available in the market. Expansion is one of the major reasons a business opts for a Business Loan. Moreover, a Business Loan can be used for purchasing inventory, upgrading the current plant and machinery, setting up new offices, managing the working capital, etc. As a business owner, you should get a Business Loan for expansion due to the below-mentioned reasons:

– Higher Loan amount 

Business requires a higher loan amount as there are several factors involved in an expansion of a business. Expansion of a business means a business might expand its inventory, hire new staff, move to a larger premises, etc. Hence, an entrepreneur should look for lenders who offer higher loan amounts with lower interest rates. The amount and rate of interest vary from lender to lender. There are numerous factors that influence your loan amount such as business turnover, the credit score of the entrepreneur, business vintage, etc. 

– No collateral Requirements

Once you meet the eligibility criteria for Business Loan, you can apply for a collateral-free Business Loan. Several lenders in the market offer a collateral-free Business Loan, especially for small businesses. No collateral requirement is beneficial for small businesses that don’t own a lot of assets. No collateral requirement also helps during the documentation process as there are lesser documents to provide. This reduces the time consumed in document verification and approval.

– Interest rate

There are many lenders present in the market that are offering Business Loans. To meet the demands of existing borrowers and attract new borrowers, these lenders offer Business Loans at a reasonable interest rate. A lower interest rate will save a lot of your outgoing funds and can be further utilised for the expansion of the business. You can use the EMI (Equated Monthly Instalments) calculator for planning your Business Loan. Lenders provide online EMI calculators on their respective official websites. There are majorly three factors that are required to calculate EMI – loan amount, rate of interest, and tenure.

– Easy Documentation Process

The easy documentation process makes it convenient for an entrepreneur who needs a Business Loan instantly. Today, most lenders offer Business Loans online, where you can upload the documents online. Moreover, the verification of the documents is done online. This gives a lot of time and provides convenience to the borrower. Here is the list of the documents that you need to provide – KYC (Know Your Customer) documents like the Aadhaar/PAN Card of the company and key person(s), Current address proof (Passport/Utility bills/Rent Agreement), Bank statements from the last three months, and Business registration proof and business address proof. Please note that there can be a few changes in the mentioned documents list, and the same may vary from lender to lender.

– Extended Repayment Tenure 

The repayment tenure is the period decided between the lender and borrower to repay the loan. EMIs (Equated Monthly Instalments) are constant payments that occur regularly for the duration of the loan. Using the EMI calculator to plan your EMI using the suitable tenure will help you avoid any losses or roadblocks in your business expansion plan. 

– Multiple Loan options

There are several types of Business Loans such as term loans, Business Loans for working capital, SME Loans, Business Loans for machinery, loans for government schemes, Business Loans for women, etc. You can use the assorted options available to cater unique needs of the business. With various lenders present in the market, availing of a Business Loan is easier than ever. Moreover, features such as a quick online application and instant disbursal process make it favourable for new-age entrepreneurs. For example, SME Loan in Hyderabad is quite popular in Hyderabad catering to different business needs of the businesses. 

– Flexibility for usage

Availing of a Business Loan provides you with freedom of usage as compared to equity investors. They generally have a say in the usage of the funds. On the contrary, lenders like NBFCs (Non-Banking Financial Companies) and banks do not interfere with the nitty-gritty of the business. As a borrower, you have full control over the borrowed funds which can be used for the expansion of the business. 

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