Setting up a business and then running it requires loans/funds. You can only convert your business plan into reality with the proper inflow of funds.
Simply put, business loans can lessen your financial problems and offer several benefits.
The Benefits of a Business Loan
Did you know?
Around 33% of small business owners or entrepreneurs struggle due to a lack of funds.
It is due to the above fact, that business loans have emerged as the most widely used financial product by business owners.
Here are some of its benefits:
- Flexibility for usage: Company owners can apply for short-term or long-term loans. It depends on their evolving business requirements.
- Convenient and easy: Getting a business loan is easy. It takes little time, and hence business operations are not impacted.
- Reasonable interest rates: Most lenders offer affordable interest rents on business loans. It is due to the rising competition. Hence, no large repayments for borrowers anymore.
- No sharing of profits: You are not required to share profits with the lenders. The borrowers need to repay only the agreed principal and interest amounts.
- No collateral required: Business loan borrowers do not require collateral to raise capital and support their company.
- Working capital support: Business loan money can be used to boost working capital during a liquidity crisis.
- Multiple loan options: A majority of lenders offer different types of business loan schemes. Such schemes include term loans, business loans, machinery loans, etc.
- Tax benefits: On a business loan, the interest payable is mostly tax deductible.
- Quick disbursal: Business loans usually need minimal documentation. Hence, they can be disbursed quickly.
- Improved business credit: Acquiring such loans boosts your business credit and cash flow. Here are a few Advantages of Business Loan
The following are the primary advantages of a business loan:
- Funds when you need them: Most startups fail because they need to raise funds quickly to respond to a business opportunity. However, availing of a business loan is simple and quick.
- The right amount: Getting such a loan is accessible only if the business case/idea is convincing.
- Flexible repayment options: Borrowers get a flexible repayment plan, customised as per convenience.
- Stay in control: Unlike in equity finance, the business owner does not have to sell company stock to the investor.
Financial Benefits of Acquiring Business Loans
Here are the financial benefits of a business loan:
Increased Funding, Increased Promotions
More funds mean more effective commercials and marketing strategies. Hence, more opportunities for business promotion and advertisement.
- Flexibility: Based on their requirement, business owners can apply for several kinds of loans, long-term or short-term.
- Liability-free: Borrowers don’t need to provide collateral for the business loan application.
- Easy access: The present business loan lending process is easy and hassle-free. Approaching a lender to explore the likelihood of taking a business loan is simple and effortless.
- The Interest Rate that People can Afford: Banks and Non-Banking Financial Corporations (NBFCs) offer businesses competitive loans. However, the collateral, loan duration, and creditworthiness can influence the interest rate on such loans.
- Repayment Options that are Flexible and Convenient: Business financing allows you to repay the loan at your convenience and profitability.
- Increasing the Range of Product Offerings: Leveraging the option of business loans, you can meet the manufacturing expenses and expand the product/service offering range. It will take your business to the heights.
- The Application Process is hassle-free: Availing of a business loan, especially for a small-scale enterprise, is stress-free. All that is required are the primary documents of the startup plus the business plan (that includes managerial costs).
- Tax cut: Business loan borrowers are not required to pay tax on the profit earned from the loan acquired.
- Initiate Positive Changes in Business Credit: Attaining a business loan positively impacts your business credit. Simultaneously, it will also boost the cash flow of your business.
How can a Business Loan Help you Grow your Business?
Around 20% of small businesses fail every year.
Do you know the reason?
It’s due to a lack of funds. Often business owners do not have enough capital to expand their businesses. This limits them from hiring the best resources and technology.
Loan lenders provide many options to business owners to borrow money. Such options include collateral-free loans, instant business loans, etc. Not to mention, such loans are offered at competitive rates with flexible repayment terms as per your business requirement.
When should I take a Business Loan?
Ideally, the right time to take a business loan is when you wish to:
- Expand your business
- Meet urgent expenses
- Address a short-term cash shortage
What are the Business Loan benefits?
Here are the business loan benefits:
- Flexible repayment plans
- No collateral needed
- Reasonable interest rate
- Quick loan disbursal
- Tax benefits
- Better business credit
What is a Flexible Loan Tenure?
A loan feature that enables you to select a repayment tenure of up to 36 months. It can be customised as per the cash flow capabilities of your business.
How much capital can I access with the Yubi Business Loan?
With Yubi, there is no limit on maximum loan accessibility. Accessing capital with Yubi business loans primarily depends on the cibil score and the loan type, among other factors.