Category: Business Loan

How to Get a Small Business Loan

How to Get a Small Business Loan?

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Every business during their business lifespan needs financial help whether from partners as investors, through loans to fund their business operations. Small business loans are the financial help that can help businesses to carry out many financial activities such as investing in new equipment, filling up inventory, giving wages to the employees or investing in a new opportunity. A small business loan helps in tackling the financial issues easily due to its instant availability. A healthy and regular cash flow is very essential to run the business operations efficiently and to achieve the set goals and objectives.

Get a small business loan

Businesses can apply to the banks and many other financial institutions to get the loan for carrying out regular business tasks. Following are certain steps that help business in getting a loan:

  • Reason for the loan: The very important thing is to know that why as a business you need money. You need to know to explain it to the credit union to get the desired loan. There are many businesses that would not be able to know for a long time the reason for acquiring the loan. It is good to take some time and look for the reason to get a business loan.
  • Look for the lender options: There are many lending options available for small business loans. Do your research and look for the options. It can be even beneficial if you visit the financial organizations and ask all your queries. It can help you choose the best by analyzing all the factors such as interest rates, duration of loan etc.
  • Give a look at the credit history: Above all the things, here comes the credit history. It is important to check your credit history as it is a big factor due to which bank can deny the loan application. Banks consider a good credit history to offer the loan.
  • Organize documents: After checking the above things, get all the required documents ready that the business needs to present to the banks. The proper documentation and a good credit history can clear most of the way.

The above tips can help you to get the required loan amount.

Real Also: Best Alternatives for Business Loans

Unsecured business loans

Best Unsecured Supply Chain Finance for Start-ups

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Startups are the businesses that are started by at least one individual. It can be extended to the number of partners that are there to offer their capital and services to the startup. There is definitely a big need of financing during the start of a small business or startup for various reasons such as stocking up the inventory, hiring a place for rent, adding equipment or machinery to the business etc. Unsecured Invoice Finance are one of the best modes of financing for startups to carry out their business activities in the starting of the business empire.  These loans are safe and easy to generate and can be a big source of help. The main aim of getting unsecured loans is to expand the solvency of the business. The small businesses or startups can have finance for around for a month to pay o their expenses, they absolutely need it to move further.

Unsecured Business Loans for Start-ups

Unsecured business loans are quick and easy and they do not need any form of security deposit from the business. Rather than a commercial lender, alternative lenders are the best to offer supply chain finance by offering the business favorable interest rate. These loans are fast and do not lay any impact on the credit score of the borrower. Following are some best available unsecured business loans for startups.

  • Term loans: These loans can offer enough capital to the startups and small businesses. The loan is granted when the business or startup agreed to pay the loan amount within the specified time frame. This amount includes the original loan amount along with the interest amount for the duration of the loan period.
  • Business lines of Credit: This absolutely works like the credit card in which a business can borrow up to the maximum limit and the interest will be charged only on the amount of money borrowed. This is a great help for the business to pay their expenses.
  • Unsecured financing options: Invoice financing and merchant cash advances are the other options of unsecured business loans. These are known as riskier options of borrowing.

While borrowing it is important for a business to look for multiple loan options, costs and lender’s requirement for eligibility.

Read More: What is Unsecured Supply Chain Finance?

Best Alternatives for Business Loans

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Best Alternatives for Business Loans

Financing your small business set-up could be tricky sometimes. Although many small businesses rely on their personal and family savings but this could not be an option for long run. This is why they need to look out for other alternatives that can support them in their small business funding. When you will look up in the market, you will find ample of options available that can give your business the right kind of financial support. But with so many feasible options, it can become quite confusing.

So, here we are listing few of these options to give you a clearer picture of them. Take a look:

  • Crowd funding

Raise money for any kind of business set-up or project with a crowd funding practice. As the name itself explains, it is a way of raising financial funds from crowd. Under this technique you actually need to harness the power of your personal networks and social networking. Nowadays, it has become one of the most popular alternatives to raise money.

  • Angel Investors

Also known as business angels, private investors, angel funders; they are actually the affluent investors who put in their money in your business in form of capital in exchange of either convertible debts or ownership equity. Slowly even this form of sharing money is becoming quite popular among small business owners.

  • Invoice advances

For getting immediate fund ash flows, nowadays small businesses also sell their invoices to third party in exchange of cash. In simpler words it could be understood as way of accessing cash from unpaid invoices. Isn’t it a different yet unique way of raising funds?

  • Venture Capitalists

It could be easily understood like a private equity wherein the private investors provide financial support to especially new start-ups, budding ventures and emerging/expanding firms. Venture capitalists only fund those businesses which ensure long term growth potential.

So, if you think that besides the personal and family savings, short term business loans is the only option available then explore the market again. Nowadays, there are plenty of options available that meet you short term business fund needs. But before you choose any one of them make sure to research and study about them well. Remember, your small home work and research can help you pick the right option.

Read Also: Benefits of Invoice Discounting

How Government Aids Financial Support to Women Entrepreneurs in India

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women entrepreneurs in India

To support women entrepreneurs in India, the Government of India has launched various financial support programs. These programs are kind of business loans for women which actually help the “women power” to grow in their businesses. Granting easy financial supports to women entrepreneurs is a way to support gender equality and strengthen economic development of the country. Thus, it is very important to know them in order to make use of them in best possible way.

So, here we are listing down few of the most popular government financial aids that are available for women entrepreneurs in India.

Take a look:

  • Bhartiya Mahila Bank

Bhartiya Mahila Bank

As the name itself explains, this institution has been especially set up to support those underprivileged women who want to start up their own venture. With a loan limit of 20 crores, this scheme has various terms and conditions which can even grant collateral free loan. This bank surely gives helping hands to budding women entrepreneurs.

  • Annapurna Scheme

Annapurna Scheme

Offered by State Bank of Mysore and Bhartiya Mahila bank, under this scheme loan is sanctioned to those bussing women entrepreneurs who want to start their business in food catering line. But with a limit of sanctioning only 50,000 Rs this loan can only be taken to fulfill working capital needs only.

  • Udyogini Scheme

Udyogini Scheme

The best feature of this scheme is that they offer loan at flexible terms and with concessional interest rates. However, the loan can only be sanctioned to women who fall in age bracket of 18 to 45 years only.

  • Mahila Udyam Nidhi Scheme

Mahila Udyam Nidhi Scheme

Known to grant soft loans that can paid back within 10 years, this scheme was launched by Punjab national Bank to support those women entrepreneurs who want to project their business in small scale sector category. With a limit of sanctioning money upto 10 Lakhs, the interest rates depend upon market rates.

  • Cent Kalyani Scheme

Cent Kalyani Scheme

The best feature of this scheme is that it does not ask for collateral, guarantor and have zero processing fees while granting loans. Available for both new start ups and for those who want to expand their business, these loans are given away to women entrepreneurs who are involved in SMEs, agricultural work and retail trading.

So, if you too are looking out to start up your own venture then before you think to apply for business loan, try out above mentioned options.