Confused about which business loan to take? Read on.
A small business loan is an excellent way for a startup to meet the preliminary expenses with relative ease. You can finance inventory, machinery, furniture, supplies, and much more. Nonetheless, it is a substantial amount of debt, which is why you must choose the loan wisely.
Many different types of business loans are available to start-ups, such as:
- Overdraft loans
- MSME/SME loan
- Working capital loan
- Term loan
Moreover, such loans can either be secured or unsecured. So, before you close the loan deal, do consider the factors mentioned below.
Additional Read: How to get a Startup Business Loan without Collateral
Business loan amount
Before you set out to borrow a business loan, consider how much loan amount you require. You can estimate an approximate sum based on your business plan and projected expenses. However, you must mention a realistic amount as the lenders will assess your business loan eligibility based on it.
In addition, lenders will also assess your business scalability and past records to make a conclusive decision.
To make the most of your borrowed funds, you must consider the repayment terms before you zero-in on a loan deal. Factors such as loan tenure, EMIs, penalties, business loan interest rate, etc. influence your ability to repay the loan on time.
Most lenders offer flexible repayment terms and schedules on such loans. Be sure to check out the various flexible repayment options available before you settle for a lender. In this manner, you can focus on your business and pay off the loan stress-free.
Estimate your EMIs
One of the easiest ways to estimate your EMIs is with a business loan calculator online. You only need to enter the loan amount, tenure, and interest rate to determine the monthly amount you need to pay every month.
However, you must estimate the EMIs before you finalise a deal to understand how much cost you can service without pocket strains. This also allows for effective financial management.
While business loans are easily available, repayment terms can differ vastly from one lender to another. As a borrower, you can avail various benefits on a loan, such as minimal documentation, competitive interest rates, pre-approved loans, low processing fee, faster turnarounds, and much more. Therefore, you should always compare lenders before you seal the loan deal.
Undoubtedly, a business loan can relieve your financial burden at the start of your business. But if you do not choose an appropriate loan plan, you may end up with a bad debt.
Additional Read: Difference Between Start-up and SME Loan
Over to you
At Tata Capital, we understand how unique every business operation is, which is why we offer tailor-made loans to suit your startup needs. Get quick and easy loans at competitive interest rates and comfortable loan tenure.
Moreover, you can head over to our website and check your eligibility with our free Eligibility Calculator. Get in touch with us today!