Is a financial crunch stopping you from launching or expanding your path-breaking business idea? If yes, then it’s time you evaluate the right funding options at your disposal. A business loan is perhaps the first thing that comes to mind, but this option comes with various sub-options you can choose from.
Which type of business finance works best for you? Do you only want to manage working capital through a loan? Are there alternative loan types that can help fund your business?
Sounds overwhelming? It’s not, as long as you are aware of the following business funding options capable of taking your establishment to the next level this year.
1. Small loan for business
This funding option is especially suitable for entrepreneurs looking for funds to start a new business. Lenders typically extend smaller amounts through this loan, which makes repayment easier and also helps build up your credit score for future business financing.
You can fund any company-related expenses through small business credit or loan – from payroll management to product development, covering marketing expenses, and more.
2. Term loan
The most common business funding solution in India is a term loan. Taken by organisations big and small, the approval of this finance option depends on the status of your business and your personal credit score. Companies are free to use a term loan for any business-related expense, but they have to specify the purpose of use to the lending institution.
Moreover, this loan is available in both secured and unsecured formats. The former requires the borrower to pledge a guarantee to the lender but the latter doesn’t.
The tenure for unsecured term loans for business is relatively much shorter than secured term loans. But the approval of either format depends entirely on your lender and the nature of your application.
Additional Loan: Grow your business with a Term loan in 2021
3. Working capital loan
This type of loan is specifically designed to help businesses with their day-to-day working capital needs, and requires collateral or guarantee. And this is why it’s typically available at an affordable business loan interest rate.
One of the best parts about working capital business finance is that you don’t need to use the entire approved amount. You can use as much you need from the entire pool of credit allocated and only pay interest on the funds utilised.
4. Angel investment and venture capital (VC)
In addition to opting for business finance, you can also look at VC funding or angel investments as a source of raising a substantial amount of capital. However, bear in mind that venture capitalists and angel investors who invest in your business will also own a stake in it and will have a say in influencing its growth in the direction they want.
The bottom line
Need a loan for your business? Apply for one at affordable interest rates, relaxed business loan eligibility criteria, and flexible repayment tenures with Tata Capital. All you need to do is apply online!
So, why wait? Visit our website to check our interest rates or use our business loan EMI calculator, and start your application today!