What is a Business Loan? 5 Benefits of Taking Business Loan

The aim of any business be it be small or mid-size or large, is to operate smoothly and effectively, grow and expand to a great height, and provide their offerings to the market. And in order to attain this in the business, it is vital to have enough funding to function appropriately and effectively.  

What is a business loan? 

A business loan is the financial aim that is taken from a bank, financial institution or NBFCs to begin with a new business venture or a start up or even to grow an already existing business. An individual/a company can avail either have a secured loan which is obtained against collateral or an unsecured business loan which is nothing but a loan without collateral. 

Moreover, unlike any other loans it also has the creation of a debt, which needs to be repaid with added business loan interest rate. 

What are the benefits of availing a business loan? 

Realizing the importance of MSMEs in contributing to the economy of the country, the Government of India has launched several MSME loan schemes for companies to grow and expand.  

Benefits of new business loan/MSME loans are as follows: 

Bare minimum requirements:

The loan requirements to avail a new business loan/MSME loans are the bare minimum. The basic requirements are a Good Credit Score, Identify Proof, Address Proof, Bank Statement Copy, Detailed Business plan, Business Registration Copy, Agreement Copy, ITR, Passport Size Photographs, etc. 

To meet day to day expenses 

To run a business successfully, the entrepreneurs have to manage its operations effectively, and cost-efficiently. While many times, the cash flows start running out and due to the lack of funds, business impact up to a great extent. To manage the business appropriately, the business entrepreneurs face a lot of problems, and to manage it they can opt for a working capital loan from various banks and NBFCs that offer for both short term and long term. 

Hiring a talented workforce

The growth of any business is directly proportional to its workforce or resources. While it is very imperative for any business owners to have a talented workforce to get the business milestones achieved on time. 

Business owners have to pay a good amount to hire talented resources, and if they run short of funding, they can always look forward to a short term business loan and have the required workforce in place. 

New equipment to expand production  

Purchase of new machinery is done so that it boosts production. As the production capacity of the business goes high, the business gets more orders from its customers and the business starts expanding. 

While buying new equipment, the business owner may wish to opt for term loans or a business loan, where the business owner will have to provide some asset as the collateral for which he is taking the MSME loan

Building infrastructure 

Any business requires basic infrastructures such as factory, office, furniture, etc. that creates a positive image of the business in the eyes of the company’s stakeholders. The small business loan is readily available with the NBFCs like Ziploan for various purposes like expansion too. 

Getting tax benefits while filing ITR 

Business owners have to pay tax for running their businesses. Taking a business loan for running the business helps in tax deduction while filing the ITR returns. 

So, what are you waiting for? Grow your business with Ziploan business loans today and take your business to the next level. 

Rashmi Sharma

Rashmi with you to ensure you and your business future. She also emphasizes the need to adjust investment plans as your goals and needs change.