Business loans are an important financial product for traders. Banks and other lenders are the best option for traders. Business owners have various business loan options such as secured loans and unsecured loans.
But there are many lenders in the market that cause confusion. Today we are going to tell you how to choose the best lender in India.
Before moving towards the information of the best business loan plan, our advice is that you first take the time to see your needs. Below are some questions, which you can start research by asking yourself.
– How much money do you need?
– What is the need?
– How long will it take you to repay the loan?
– How long have you been in business and what is the current financial condition of the business?
– Can you keep a property as a guarantee?
– What is your credit score and are there any outstanding loans?
– Do you need a loan for a long term?
After answering all these questions, now is the time to consider various loans, so that the right loan can be chosen for you. From here, understand who are the best business loan lenders and how to apply to them.
Types of Business Lenders
Small Business Administration (Small Business Loan) or SBA loans are special types of loans, which are designed to meet the needs of small business. SBA loans reduce the risks of the lender as the government guarantees the loan back. According to the instructions related to how to use the money, when it should be repaid, traders can choose different SBA loans.
Pros and Cons
Government guarantees range from 75-90 percent, thereby eliminating the risk of borrowers. Therefore, such loans are very suitable for the customers. However, the disadvantage of SBA loan is that it takes extra paperwork and fees. It also takes a long time to get approved. To qualify for this loan, you must have a superb eligibility criterion.
Conventional bank loan
A major advantage of taking a bank loan is that due to competition, interest rates are low in it. However, its approval process is very long and slow. If you want to take a business loan soon, then banks are not the right option for you. Apart from this, it is difficult to get approval from small business loan banks.
– Small business owners are highly attracted towards NBFCs as it provides instant business loans.
– NBFC’s application process for small business loans is also not long.
– NBFC also provides online business loan facility. He takes only three days to approve or disallow the loan. Some NBFCs approve loans and send money to your account within three days.
– There are many NBFCs who offer small business loans online. This gives a lot of options for the merchant to choose.
Pros and Cons
The positive aspect of taking an NBFC business loan is that it does not have many restrictions on the end use of money. Also, the loan gets approved immediately. On the other hand, the negative aspects of NBFC are not there because its business loan rates are also very competitive in the market.
Let us tell you what kind of business loan you can take
Types of Business Loans
Equipment loan: You can take this loan for investing in machines and equipment. This loan can also be taken to upgrade machines and equipment with new technology. Tools are also important in the company’s profit and production. Apart from this, the loan amount can also be used for tools, vehicles and monthly expenses.
A major advantage of machinery loan is that it does not have to be guaranteed as anything because the machines and equipment purchased are themselves guaranteed.
Working Capital Loans: These are also short term business loans for business, for which business operations are carried out. Working capital loans can be taken from banks or other lenders. The advantage of taking this loan is that your business will also run smoothly and you can also find more ways to increase revenue.
Line of Credit: Like working capital loans, line of credit also provides loans for everyday needs. Keep in mind that line of credit is not suitable for big purchases. These are very short term loans. In this loan, you will have to pay interest only on the amount that you have used, but not on the entire amount. Apart from this, these loans are unsecured and do not require any guarantee or security. You can also take this kind of loan to make your credit score, so that you can also take a large amount in future.
The best lender for you will be the one who gives you a loan easily, that too in a short period. Apart from this, you have to consider the rates of business loans for the right choice