Simple reasons why small businesses must look at Business Loans

A timely and sufficient injection of cash is crucial to the growth and sustainability of any business. Lack of finance is often the reason why businesses with a promising future stagnate in mediocrity. Timely cash flow can help businesses accept bulk orders, hire new resources, explore new markets, or kickstart aggressive marketing campaigns. 

Friends and family can be crucial in helping you out financially with your business venture. However, to design a systematic approach toward business growth, formal sources of funds must be availed at some point.

Credit for your small business

Banks and financial institutions offer business loans to entrepreneurs for their urgent as well as planned financial needs. A business loan is a fixed amount you borrow for a specific tenure and repay with interest. The interest is applicable to the entire borrowed capital, and interest is generally calculated monthly. You can then repay the business loan in the form of fixed monthly instalments. 

On the other hand, if you need finance on an ongoing basis, you could opt for an overdraft instead of a business loan. An overdraft offers the ability to withdraw more funds from your bank account than what you have as a balance. Overdraft facility is offered up to a specific limit, and it is a short-term fund source. Interest is charged only on the withdrawn amount and calculated daily. You can repay your overdraft withdrawal as and when you want by depositing funds into your overdraft account.

Why are Business Loans Beneficial for Your Business?

A business loan is an ideal way to meet working capital shortages. It can add financial stability when your sales are going through a rough phase, or your business has witnessed unexpected expenses.

Small businesses may find it challenging to provide sufficient collateral against loans. Fortunately, business loans are provided without collateral and are useful for small businesses. They are also available for different amounts and tenure. Depending on your needs, you can avail of short, medium, and long-term funds through business loans. IDFC FIRST Bank's FIRST STEP Micro Business Loan, which is designed for small businesses, offers loans from Rs 25,000 to Rs 20 lakh, and can be availed and repaid in up to 144 months.

Get Your Business Loan

The documentation needed to avail of a business loan is relatively straightforward. Documents like address and identity proof, bank statement, form 60 or PAN, and business existence proof are sufficient to avail of this or similar business loans. Micro enterprises do not even need to furnish their ITR to avail of a FIRST STEP Micro Business Loan.

To apply for this small business loan, visit the IDFC FIRST Bank and sign the micro-business agreement. Once you apply for the loan and furnish all the required documents, your loan will be disbursed within four days. 

Business loans offer quick cash and flexibility to your business. And with products like the IDFC FIRST Bank's FIRST STEP Micro Business Loan, your small business can expand and thrive with timely cash support.

Disclaimer

The contents of this article/infographic/picture/video are meant solely for information purposes. The contents are generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. The information is subject to updation, completion, revision, verification and amendment and the same may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject IDFC FIRST Bank or its affiliates to any licensing or registration requirements. IDFC FIRST Bank shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information mentioned. Please consult your financial advisor before making any financial decision.