In India, entrepreneurship is on the rise, with more and more people starting their own businesses every day. However, starting a business requires a significant amount of capital, which can be challenging to obtain. Fortunately, there are several types of Shriram Business Loans available to entrepreneurs in India. In this blog post, let’s explore the different types of business loan options and how they can help you turn your business dreams into reality.
Types of Business Loans in India and How They Work
Business loans are a vital financial instrument for entrepreneurs and companies looking to start or expand their businesses. In India, there are several types of business loans available to business owners.
Term Loans
Term loans are the most common type of business loan. This type of loan is provided by banks and financial institutions to businesses for a fixed term. Term loans can be used to purchase fixed assets, such as land, buildings and equipment or to finance working capital needs. The loan amount, repayment period and interest rate are predetermined and the loan is repaid in equal instalments over the term of the loan.
Working Capital Loans
Working capital loans are short-term loans that provide funds for a company's day-to-day operations. This type of loan is used to finance inventory, accounts receivable and other short-term operational expenses. Working capital loans are usually unsecured, meaning that the borrower does not have to provide collateral.
Farm and Construction Equipment Loans
Equipment loans are designed to help businesses purchase or lease equipment. This type of loan is ideal for companies that require expensive machinery or equipment to operate. The loan can be used to purchase or lease equipment and the equipment itself serves as collateral for the loan.
Challan Discounting
Challan Discounting, also known as invoice financing, is a type of loan that allows businesses to sell their outstanding invoices to a lender at a discount. This type of loan is ideal for companies that have outstanding invoices and need cash flow immediately. The lender provides the business with a percentage of the invoice amount upfront and then collects the full invoice amount from the customer when the invoice is due.
Business Line of Credit
A business line of credit is a revolving loan that allows businesses to borrow funds as needed. This type of loan is ideal for companies that have fluctuating cash flows or seasonal sales. The borrower only pays interest on the funds that they have borrowed and they can draw on the line of credit as needed.
Government Loans
The Indian government provides several loan schemes for small and medium-sized enterprises (SMEs). These loans are provided through various government programs and initiatives, such as the Small Industries Development Bank of India (SIDBI) and the National Small Industries Corporation (NSIC). The terms and conditions of these loans vary depending on the program and the borrower's eligibility.
Key Highlights
|
Features and Benefits of Shriram Business Loan
Features | Benefits |
|---|---|
| Secured or Unsecured | Choice of loan type based on collateral availability and creditworthiness |
| Competitive Interest Rate | Affordable interest rates starting from 10%* |
| Loan Amount and Tenure | Borrow as per your business needs and choose a repayment period (12 to 84 months for Secured Loan and 12 to 48 months for Unsecured Loan) that suits your cash flow |
| Minimal Documentation | Hassle-free application process with minimal documentation requirements |
| Quick Loan Approval and Disbursement | Receive funds within a few days of approval for quick business operations |
| Customised Repayment Option | Tailor the business loan repayment schedule to match the seasonal nature of your business |
| Multipurpose Loan | Use the funds for business expansion, working capital, purchase of equipment, inventory and more |
| Tax Benefits | Claim tax deductions on interest paid as a business expense |
| Business Growth | Enables you to invest in growth opportunities and improve cash flow |
| Build Business Credit | Regular repayment can help improve your credit score and qualify for future loans |
Steps to apply for a Shriram Business Loan in India
If you are interested in applying for Shriram Business Loan in India, here are the steps you need to follow:
Eligibility Criteria:Check if you meet the eligibility criteria for the loan. Typically, you will have to be a business owner with a minimum age of 21 years and a maximum age of 70* years. |
Step 01: Visit the Shriram Finance website and navigate to the Business Loans section.
Step 02: Determine the loan amount you need and the repayment period you prefer. You can use the Shriram Business Loan EMI calculator on the website to get an estimate of your monthly repayment amount.
Step 03: Fill out the loan application form with your personal and business details.
Step 04: Submit the required documents, such as PAN card, Aadhaar card, bank statements, business registration certificate and income tax returns.
Step 05: Wait for the loan approval process to complete. Shriram Finance may conduct a credit check and verify your business details before approving the loan.
Step 06: Once your loan application is approved, the funds will be disbursed to your account
It is important to note that the loan application process and requirements may vary depending on the lender and the type of loan you choose. Therefore, it is recommended to carefully read the terms and conditions of the loan before applying.
To conclude, business loans are not just about the money, but about the potential they offer. With the right funding, entrepreneurs can turn their dreams into reality and contribute to the growth of the Indian economy. So, whether you're looking for a working capital loan, equipment financing or any other type of business loan, take the first step and explore your options at Shriram Finance today.
