The finance part of the business can be tricky at times, and you might wonder about the best possible ways to fund your business. There are various needs in a business like buying, purchasing, leasing, shopping for new machinery, working capital requirements, and much more. There are several types of business loan available for every kind of situation.
Types of business loans in India:
● Term loan:
A term loan is one of the most common loans for businesses, and it can be both secured and unsecured. The nature of the loan depends on the credit history of the particular business. The tenure of such loans is fixed, and it ranges somewhere between 1 to 5 years, and if it is a secured loan, then it goes up to 15 to 20 years. You can take up this loan for specific purposes that you have in a business, like capital expenditure.
● Start-up loan:
It is the kind of loan which is beneficial for new businesses. Usually, the applicants need an excellent credit history, but the loan helps them improve their finances and credit history. Various things are considered before giving the applicant the loan, like loan amount, interest rate, and much more. The business needs to exist and be established to get the loan.
● Working capital loan:
It is the kind of loan that is taken to overcome the shortage of cash flow to go on with everyday business activities. It helps in generating the cash flow in the business, which is necessary to keep the business on. Wholesalers, retailers, manufacturers, and service providers are applicable for this loan.
● Equipment financing:
Another type of business loan that is common is equipment financing which is usually taken by manufacturing businesses. You can find out the business loan interest rate and then opt for this loan if you want equipment financing. There is some security taken in this loan because it concentrates on equipment specifications, and the interest rates can be lower as compared to others.
● Business loan for women:
Another common loan for businesses is business loans for women entrepreneurs. The government of India has been taking initiatives in order to encourage women to establish their own businesses. A special loan for women gives them start-up loans, and the process is also faster. The business loan interest rates are usually standard, keeping everything in consideration.
● Loan against property for SME:
There are loans against property for SMEs which can exceed more than 50 lakhs. The applicant has to mortgage their property in order to avail of the funds of this loan. It helps the person purchase commercial or residential properties. The tenure for such loans goes up to 15-20 years, but it also depends on the terms and conditions of that particular financial institute.
You can go for a business loan that is going to fulfill your requirement and provide you with the necessary funds that you need in order to take forward your business operations. You can contact and speak to the bank that you want to avail of the loan from so that the process becomes faster and easier.