Financing Options to Grow Your Business

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Finance

Any business, irrespective of its size, requires finances to keep it running. Finances play a key role in critical business operations including expansion, machinery purchase, and improving cash flow among others. In the current economic scenario, thanks to the evolution of non-banking finance companies (NBFCs) in India, you have more options at your disposal to finance your business than ever before.

Relaxed lending norms, easy documentation, flexible tenors, and a high loan amount from NBFCs give you the much-needed liquidity to grow your business. Read on to know about the various financing options that help you propel your business to the next level.

1. Personal Loans :

Earlier Personal Loans were availed for personal needs, the evolving economic landscape has made them extremely relevant for business purposes. If the loan amount is low and you don’t have collateral to offer, a Personal Loan is your trusted financial ally.

What makes Personal Loans an ideal financing option for your business is the fact that you don’t need to elaborate on how you intend to use the funds or submit a detailed plan to your lender. With NBFCs radically changing the lending landscape, availing this loan is a hassle-free affair nowadays.

An unsecured mode of finance, this loan gives you the liquidity to address various needs. Also, new-age Personal Loans from NBFCs come with a host of benefits and features. With Flexi Personal Loans, you can borrow only the required amount and save on monthly EMIs as interest is charged only on the amount you utilize from your approved loan limit and not on the entire limit, unlike term loans. This can almost halve your monthly EMIs.

Quick disbursal of funds, in just 24 hours, makes this Personal Loan offering one of the fastest in India. Flexible tenors, ranging from 12-60 months, and simple eligibility criteria for Personal Loan makes it one of the most effective funding options to raise capital for your venture.

2.Business Loans :

Today, business loans are available at competitive interest rates from a host of financial institutions including NBFCs. The need for collateral for such a loan can vary across lenders. While some lenders may ask for collateral, others may offer this loan without you requiring to put your personal or business assets on the line as security. However, you need a good credit score to enhance your creditworthiness and secure a high loan amount.

You can meet hundreds and thousands of potential lenders online and compare their offerings. Not only this, you can read the features and benefits of various business loan products and choose the one that best suits your needs.

3. Working Capital Loans :

Generally taken for short-term funding needs, a working capital loan is another effective financing option you can utilize for your business. This loan is ideal to fund day-to-day operations of your business such as paying for utilities, salaries of employees, etc.

One of the biggest benefits of working capital loans is that there’s little to no restriction on the usage of the loan amount. Lenders offering working capital loans simply want you to utilize the money in a manner that enhances revenue opportunities for your business. Just like business loans, the need for a collateral for working capital loan varies across lenders. While some may ask for it, others may forgo it.

4. Government schemes :

There are several government schemes through which you can raise finances for your business. The Pradhan Mantri Mudra Yojana is one of them. Under this scheme, there are three offerings namely:

  • Shishu (Providing loans up to Rs.50,000)
  • Kishor (Providing loans more than Rs.50,000 and up to Rs.5 lakh)
  • Tarun (Providing loans more than Rs.5 lakh and up to Rs.10 lakh)

In the recently tabled Union Budget 2018, the Government has announced its plan to extend the lending target under the Yojna to Rs.3 lakh crore this fiscal. You can avail funds for your business through such schemes.

Before opting for the above financing options, it’s essential for you to gauge your requirements, talk to multiple lenders, compare their offerings, and choose the one that best suits your needs.

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