Many financial institutions are operating in India that offers small business loans to help business owners meet their financial requirements. Some of the most popular borrowing options include banks and NBFCs. Out of these two options, NBFCs have become one of the most favourite choices for small business owners who are looking for quick business loans due to the numerous features.
Small Business Loans & NBFCs
NBFCs are specialised lenders who offer their services through their online platforms only, i.e., website or mobile App. They follow a paper-less and minimal documentation process, wherein you need to provide only scanned copies of your documents to process the application. These companies offer a wide range of loans, depending on your requirements, such as capital loan, machinery loan, term loan, Flexi loan, working capital loan, etc.
Small business loans are one of the most popular funding sources for business owners to meet various financial requirements of the business. NBFCs offer unsecured small business loans of up to Rs. 5 Lakhs, if the applicant’s annual turnover is over Rs. 10 Lakhs. The repayment tenor for small business loans extends up to 24 months. The rate of interest is also very competitive, which is charged on reducing balance basis. The loan amount borrowed can be used to meet numerous requirements, such as the purchase of machinery/equipment, land, meet working capital requirements, etc. The funds thus borrowed under small business loan should be used for business purpose only.
With the rapid integration of technology in the financial services sector, the process to apply for a business loan has become relatively simple. You can easily compare various business loan products from multiple online lenders and apply for the same online through the website or mobile app. If the loan application meets the lender’s requirements, the entire process starting from application to disbursal would be completed within a few days.
Small Business Loans for Short-term Requirements
Availing a small business loan is an ideal option to meet various funding requirements of a business efficiently, without stressing the finances. The following are some reasons as to how a small business loan can meet short-term requirements of a business:
- Flexibility: NBFCs offer unsecured business loans which entail no responsibility on your part to inform the loan lender about the end-use of funds. You can use the money for any business-related requirement.
- Low Interest: unsecured loans: provide you easy access to a ready source of funding at competitive interest rates as compared to private money lenders and credit cards. Therefore, you can supplement the financial cycle to take care of all the business expenses.
- Quick Processing: With the paper-less process that the online lending companies follow, the application for a business loan is processed in a few working days. It thereby offers access to a ready source of funds promptly.
- No Foreclosure Charges: You have the option to pre-pay the loan amount before the completion of tenor if you have spare funds. The NBFCs don’t charge any penalty on prepayment after the payment of 6 EMIs. This helps in saving a lot of money.
With so many benefits on offer, availing a small business loan is an ideal solution to the problem of a shortage of funds to meet the short-term business requirements.