Business Loan

What is a Business Loan?

Businesses have multiple options to secure funding, be it internal sources or external options. When a business opts for an external source, such as borrowing from a bank or lender, it is referred to as a business loan. This means securing a line of credit or raising funds at a specific interest rate that is to be repaid within a definite timeframe.

Depending upon the business’s reputation, creditworthiness, and nature, the lender may agree to offer a secured or unsecured business loan. The money can be used to expand operations, meet working capital requirements, purchase plants and machinery, or invest in real estate. Business loan for women also helps them to get financial help whenever they needed.

Different lenders offer different types of business finance that may include small business loans, startup loans, and even business loans for women. Continue reading to understand the importance of business loans and how they can help to improve the operations of your organization.

Types of Business Loan In India

From Capital (or term) Loans to meet your day-to-day requirements to Merchant Cash Advance Loans to expand your customer reach, select one of these business loan options from this list to get your work done. The type of loan will help you determine how to get a business loan approved in the shortest time.

Term loan:

Term loan provide flexible repayment options on low-interest rates. With Indifi, you can get up to Rs. 50 lacs with the lowest processing fee of upto 4%. The payment options are highly flexible with the longest permissible tenure of 36 months (3 years). It comes with an astonishingly low interest rate on a business loan of 1.5% per month to reduce the pressure of repayment.

Working Capital Loan:

Working capital loan is taken to meet the short-term cash shortage or when the business’s cash is not enough to take care of the day-to-day operations. Nowadays, financial institutions offer collateral-free working capital loan that are usually taken for 6-12 months.

Machinery Loan:

A machinery loan is a type of business loan that finances the purchase of any new equipment or machinery. Technological advancements are creating innovative, state-of-the-art equipment every day. Such equipment makes business processes productive and efficient. By availing machinery loans, businesses can upgrade to better-quality equipment that can provide faster turnaround times, help in meeting production targets, and ultimately gain customer trust. This, in turn, helps businesses increase their sales and garner more profits. Any individual or business involved in the production of goods is eligible to apply for business loans.

Bank Overdraft/ Credit Lines:

For a small business in need of frequent cash flow, an overdraft facility also known as Line of Credit helps in getting instant cash for paying vendors or extending credit to customers. Except for retail companies, every other industry like manufacturing and hospitality can get this business loan to meet urgent cash demands. With one-time approval, you can use the loan for withdrawing funds for up to 12 months and only pay back the amount you use.

Merchant Cash Advance:

With a low-interest rate of 1.5% per month, you can get up to Rs. 50 lacs with a tenure of 12 months maximum. Small businesses looking to stock more inventory, expand their customer base, or extend credit can get this business loan if a major number of transactions occur using card swipes. This Unsecured business loan allows repayment through daily deductions.

Retail Loan:

Retail loan is usually availed by individuals when they need credit to set up a business, purchase assets (property, vehicles), emergency medical purposes, or travel. The prerequisite is to have a good credit score since banks use it to ensure the individual’s repayment ability. A good credit score with a great repayment history can help in availing lower business loan interest rates and better credit terms overall.

E-commerce Business Loans:

With the advancement of new technologies, smartphones, and the Internet, almost every business is moving online to set up its e-commerce website. The e-commerce sector is booming in India as many direct-to-consumer (D2C) brands have emerged in the last five years. The competition significantly increased which in turn requires online businesses to constantly invest in marketing, promotions, inventory, logistics, etc., to gain customer traction and keep up with the demand. E-commerce loan comes to the rescue and are one of the simpler ways for e-commerce businesses to avail funds.

Trading Loans:

One of the crucial stakeholders in supply chain businesses is the trader that connects the manufacturer and the consumer. Trading loans are provided by financial institutions to help traders avail quick and easy funds required for their day to day operations. However the majority of banks in India have stringent requirement and lengthy and slow processes. Any individual or business involved in the sale and purchase of goods is eligible to apply for business loan.

Business Loan Interest Rates & Fees

Benefits of Business Loan From Indifi

Collateral Free

Indifi has an online process of loan application that guarantees minimum documentation and quick disbursal of payment. We use smart technology to check applicants’ profiles carefully, so they don’t need to provide any assets or property as security for the loan. Therefore, you can get a unsecured business lending to fulfil your immediate needs

Swift Disbursal

We follows a swift and hassle-free loan disbursal process. You apply for business loan and get it processed within 48 to 72 hours for an amount up to INR 50 lacs.

Flexible Repayment Options

For small businesses seeking flexible repayment structures to meet their operational requirements, Indifi has flexible repayment options at low-interest rates starting from 1.5% per month. Companies also enjoy instant GST business loans by applying at Indifi.

Customized Loans

There is no one-size-fits-all model when it comes to business loans. Indifi has tailored solutions with the help of multiple lenders to meet the dynamic funding requirements of every company.

Low-Interest Rates

The business loan interest rate rolls-out at low, starting from 1.5% per month. However, the borrower also needs to pay upto 4% processing fee.

Transparent Processing

From application to EMI repayment, you can apply for a business loan online at Indifi. Thus, there is no scope for finding any hidden charges during the loan repayment.

Required Business Loan Documents for Different Business Types (checklist)

How Loan for Business Can Help MSMEs?

Our MSME Loans give you the money needed to keep your business running every day, so you can keep serving your customers without any interruptions. This can help you in:

Boost Working Capital

Fuel Business Expansion

Upgrade Equipment & Technology

Access to New Technology

Bulk Inventory Purchases

Handle Unexpected Expenses

Achieve Long-Term Growth

How to Apply for Business Loan Online ?

The application process for a business loan is free from unwanted delays and unnecessary paperwork across india. You can apply for a business loan online by fulfilling these requirements for a business loan.

Submit Your Online Application

Fill in your basic and company details. Mention your fund requirements and prepare the essential documents for submission.

Attach Your Documents

Upload the scanned copies of the documents needed for a business loan like business registration proof, bank statement, PAN card, Aadhaar card, Company PAN card, Partnership deed, Drug Licence, VAT Registration, and GST filing as applicable.

Wait for Approval

Once the correct documents and the filled application form is duly submitted, Indifi will process your application and send the approval within 72 hours. After getting the instant business loan approval, your loan amount will be disbursed immediately in your bank account.

Do’s and Don’ts of Small Business Loans

A business loans for small business can play a huge role in meeting the financial needs of your business and must be planned very carefully. Here are some important factors to consider before applying for a business loan online as a small venture..

Do's

Do Analyze Your Business Requirements:

The first step to applying for a NBFC business loan is to understand why your business needs it. Conduct in-depth research to understand its financial requirements and the different ways to meet them. Opt for a loan if there is a genuine need for one.

Do Compare Different Financial Institutions:

Every institution has its terms and conditions attached to a loan. Comparing different lenders before borrowing will allow you to analyze their interest rates and other terms and conditions to find the one that best matches your needs.

Do Opt For Specialized Lenders:

Various specialized lending institutions cater to medium and small businesses, offering tailored business loan without collateral. The loan conditions of these lenders are often easier and better aligned with your business needs in comparison to other large-scale commercial banks.

Do Create a Realistic Budget:

Setting a realistic budget not only makes the GST business loan application process easier but can also help you avoid financial trouble in the future. Define a budget that clearly states the purpose of the loan, its tenure, and the repayment process you want to follow.

Don’ts:

Don’t Rush for the Loan:

Even if you are in urgent need of money, do not settle for the first unsecured business loan offer that comes your way. Instead, take time to carefully evaluate each offer so that you can prevent any unnecessary expenses and understand the long-term impact of the loan on your business.

Don’t Hesitate to Ask Questions:

Business loans, especially a business loan for women, can get complicated if you don’t fully understand their terms and conditions. So, if you come across any doubts, ask them freely! You can even seek expert advice for better understanding.

Don’t Make False Estimates:

It is never a good idea to underestimate your expenses or overestimate your income. Take the time to assess your expenses carefully, keeping in mind that they might increase in the future due to rising interest rates and inflation. Similarly, keep your income estimates realistic. Painting an overly positive picture can lead to difficulties if things don’t go as planned. Being realistic helps you stay prepared for unexpected changes.