Access to capital is a critical factor in the success of any business, whether it's a small startup or a large corporation. Business Loans can provide the necessary funds to expand operations, invest in new equipment or inventory, hire additional staff, or launch new products or services. By unlocking these opportunities, Business Loans can act as a powerful multiplier for businesses of all sizes.
Not all Business Loans are made equal
However, before availing of a Business Loan, there are several important factors that you should consider. Here are some key factors to keep in mind:
Purpose of the Loan: Determine the specific purpose of the loan and how it will benefit your business. Whether it is for expansion, purchasing inventory, or covering short-term cash flow needs, having a clear understanding of why you need the loan will help you choose the right loan product. Poonawalla Fincorp's Business Loans, for instance, cover every business need - from overcoming temporary shortfalls to boosting working capital reserves to funding business expansion and diversification.
Credit Score and Eligibility Criteria: Your credit score is a key factor in determining your eligibility for a loan and the interest rate you will be charged. A higher credit score typically translates into a lower interest rate and better loan terms. So, if your credit score is below 700, take necessary steps to improve it before you apply for a Business Loan. Most Business Loan providers also spell out the eligibility criteria on their websites. Poonawalla Fincorp, for instance, keeps it incredibly simple: you must be between 24 and 65 years of age (at loan maturity), your business must be at least 2 years old and must have an annual turnover of at least ₹6 Lakh.
Collateral: Depending on the type of loan you are applying for, you may be required to provide collateral to secure the loan. This could include business assets such as equipment, inventory, or property. Make sure you have a clear understanding of the collateral requirements before applying for the loan. However, to avail of a Business Loan from Poonawalla Fincorp, you don't need to pledge any collateral. Poonawalla Fincorp understands how each Rupee counts when you're running your own business, and makes the process of the loan application, approval and disbursement as easy as possible. Combined with their strong customer service ethics, this means that most Poonawalla Fincorp loan customers never even have to step into their offices - the whole process is conducted online and seamlessly.
Loan Amount and Terms: Consider how much money you need and the repayment terms that will work best for your business. Longer repayment terms may result in lower monthly EMI payments but may also result in paying more interest over time. Therefore to empower you to make an informed decision, Poonawalla Fincorp provides a Business Loan EMI calculator on its website, for each of its loan products. Using the calculator, you can work out the period and EMI amount that is most suitable for you.
The Fine Print: As with all financial instruments, always read the documents carefully. Take the time to understand the terms and conditions, penalties and any hidden clauses that may be triggered in case of defaults or delays. Sometimes, despite your best intentions, you might find yourself in a situation where you can't meet your monthly EMI commitment. If you know beforehand what that's going to cost you, you won't be taken by surprise.
The Poonawalla Fincorp Advantage
Not only is Poonawalla Fincorp known for its strong 'customer first' ethic, but the company also prides itself on strong processes that are geared to support its customers. The application process, for instance, takes a very short time, and needs minimum documentation to be uploaded online: Company PAN Card or Director/Proprietor PAN Card, Proof of Address (Aadhar Card/Voter ID Card/Passport), Business Address Proof (Rent Agreement/Utility Bill) and financial documents like bank statements and IT returns.
Poonawalla Fincorp also believes in having complete transparency while dealing with its customers. You won't be surprised by any fees or charges, all of which are mentioned on the website up front, and the loans are surprisingly affordable and collateral-free Poonawalla Fincorp offers among the lowest interest rates in the industry and also doesn't penalise you for prepayments. This means that not only do you save on interest paid out because of low-interest rates, but you can also multiply those savings by making part prepayments whenever you have a windfall.
Moneycontrol journalists were not involved in the creation of the article.
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