It is not an unknown fact how small and medium businesses have mainly contributed to the country’s total GDP and how they are regarded as the vital source of employment for India’s growing population. But when it comes to getting a Business Loan, entrepreneurs face much more challenges in getting the loan than they face in establishing the business itself. But not anymore!
Small business owners can improve their odds of getting a Business Loan by deciding the appropriate type of financing, familiarising themselves with credit scores, and choosing the most competitive available lending options.
Many business loan schemes are available nowadays to create a hospitable atmosphere in the small business ecosystem, foster sustainable economic advancement, and build many more job opportunities by uplifting and encouraging entrepreneurs. But before approaching any lending institution, it is always advisable to have explicit knowledge of different types of Business Loans, your eligibility criteria, the features the loans provide, and the documents needed to simplify the process.
Here are the best Small Business Loans For you to ease your Entrepreneurial Journey
Sometimes getting a small Business Loan can be tricky due to various reasons. Although, in general, small Business Loans are reasonably accessible as they require less strict qualifications than traditional or large Business Loans. Small business owners can choose from several loan options available in the market with different qualification requirements, borrowing terms, and application processes to suit their businesses.
Term Loans in Online Mode
Traditional financial institutions and online NBFCs usually provide term loans. However, more qualification requirements may be needed by financial institutions than online NBFCs. Usually, small businesses must be in operation for at least three years before qualifying for a Business Loan from online lending institutions like Clix Capital. The business should also have a minimum turnover of 1 crore to be eligible for a Business Loan.
Financing Based on Assets
This is more secured financing and comes with flexibility and fewer risks for the lending institutions as it is secured by valuable business assets such as machinery, inventory and equipment, accounts receivable and real estate, etc.
Thus, this gives the entrepreneurs significant funds to work without meeting the traditional qualifications or borrowing requirements for small Business Loans.
Loans with Business Credit Cards
Business credit cards, similar to personal credit cards, give access to funds usable for small to large purchases for the business. Small business owners can get approved based on their personal credit scores. On top of that, they don’t need to fret over any valuable collateral as these business credit cards are mostly unsecured. Cardholders only need to pay interest on unpaid balances at the end of the tenure cycle, usually every month. This helps the owners operate expenses every month, and with these, they can avoid paying the interest too.
Loans From Friends and Family
Small business owners who cannot meet the loan qualification or methods like business credit cards or only qualify for a small Business Loan can opt for a loan from friends and family.
Business owners should confirm a vital business relationship with the lending party by reviewing the business plan with them, discussing their roles in the business, recording the terms of the loan in writing, and primarily ensuring that both parties agree to the interest rate and other terms and conditions regarding the loan so that conflicts are prevented down the line.
Crowdfunding
If traditional lending institutions, friends, and family are not an option, borrowers can always trust crowdfunding platforms to access operating expenses. Small business owners can set up a fundraising campaign and gain money donated by various investors or credit providers. It is the best strategy for small business owners who don’t need to raise a large sum of funds with creative or enticing offerings. On the other hand, they are not even charged with interest or additional fees by the lending institutions. Although unnecessary, the campaign might be more successful if owners entice donors with remarkable services, products, and gifts.
Small Business Grants
State and local governments and federal organisations often offer grants to small business owners to grow their businesses. These business owners don’t require to repay or be charged with fees or interests. But these types of financing are usually very competitive as they are mostly offered to women entrepreneurs, veterans, minorities, and immigrants.
Conclusion
While deciding to get their first loan, business owners should review lending institutions and evaluate various points in eligibility and accessibility, loan details, customer experience, the application process, and so on.
And if you are an entrepreneur wondering how to get the most suitable loan for your small business, Clix Capital can be your preferred lending institution. They are well-known for employing innovative technology to make loan processes faster, easier, and more relevant for the young borrowers. So, expedite your entrepreneurial journey with the most beneficial and suitable small Business Loans.