Top 5 Benefits of Business Loans - Business Loan Blog - Tata Capital

Top 5 Benefits of Business Loans

Mar 06, 2017

Promoters may avail institutional funding for several reasons. These include financing new equipment, expansion to larger premises, procure more inventories, sustain operations and much more.

These loans are beneficial for growing the business and meeting working capital requirements (especially during tough economic conditions). Here are the top five benefits of availing business loans from an institution:

  1. Flexibility
    Owners may avail different types of loans depending on their fund requirements. Companies may choose term loans to meet the fund requirements in the short to long term. Alternatively, they may opt for working capital loans to meet the operational expenses of the business. Another alternative is an overdraft facility whereby promoters may overdraw the current accounts as per the agreed terms and conditions. The flexibility makes it easier for promoters to avail a loan for business facility.
  2. Convenient Repayment Options
    The promoters are offered different repayment options as per their convenience. They may work out a repayment plan as per the business cash flows to avoid facing financial difficulties while servicing the loan. Owners may increase or lower the monthly installment as per the profitability or choose bullet payments to periodically repay the amount.
  3. Affordable Costs
    Contrary to popular belief, the business loan rates are not exorbitant. These are determined based on several criteria, such as tenure, the financial situation of the business, market dynamics and the borrowers' credentials. In addition, the commission and processing fees are nominal, which make it easier for businesses to borrow money from institutions.
  4. Easy to Avail
    Several leading institutions like Tata Capital offer loans to businesses without a guarantor or collateral. This makes it easier for small business owners to access funds to meet their cash flow requirements and sustain their ventures. Additionally, technical development makes it possible for promoters to avail the loan online. Borrowers are also able to keep track of their loans post-disbursement by checking various details like payment schedule, interest certificate and repayment history through the online medium.
  5. Sustain and Grow Business
    Companies are able to meet the funding needs to efficiently manage their operations as per the business cycle. Moreover, businesses in the expansion mode are able to use the borrowed amount in different ways to move up in the value chain. Most lenders do not specify the uses of the loan amount, which means the owners have the versatility to utilize the funds as per the needs of the business.

A loan provides several benefits and owners must evaluate their requirements before making a decision. Knowing all the terms and conditions before signing the dotted line is important to prevent difficulties in the future.