A proprietor’s role involves being ready with the required resources for their business. As a proprietor, you should have the funds needed to expand your business at all stages of its growth. Your business should not suffer due to a lack of funds. The Covid-19 pandemic and the subsequent lockdowns made businesses around the entire world face challenges. One extremely efficient solution for financial crunches during, and post-pandemic, is a business loan. Here are 10 ways a business loan can help you:
1. Investing Flexibly
When you take a loan from a bank or financial institution, how you spend the loan amount is your choice. If you raise a loan through the capital market, the investors will tell you how to spend your money. As a proprietor, you know your priorities and how to generate the highest return on investment. When you have the flexibility to invest your funds, you will maximize returns.
2. Quick Application Process
You don't need to wait for hours in the queue for a business loan. When you apply online, the loan process is smooth, hassle-free, and requires minimal documentation. The eligibility criteria are as follows: Your age should be between 25 and 65 Your business should be over 3 years old Your Income Tax Returns should be filed for at least one year The following documentation is required for a business loan: Identity proof: Documents acceptable as identity proof are Aadhar card, passport, PAN card, and driving license. Address proof: Your electricity bill, passport, and telephone bill are acceptable as address proof. Business documents: This includes financial statements like balance sheet and profit and loss account, bank statements for the last 6 months, and the recent income tax return.
3. Affordable Interest Rates
The interest rate depends on your loan, with a higher loan having a lower rate of interest. Some lenders offer competitive rates of interest for a business loan, so always scan the market for the best prices and flexible repayment terms.
4. No Sharing Of Profits
Unlike equity shares, you don't share profits with anyone. Even if you make higher profits, the EMI for your small business loan every month remains the same. The principal and interest of your loan do not change with your profits. To find out how much your monthly EMI on your loan will be, take advantage of numerous free tools and EMI calculators online.
5. No Collateral Required
As a proprietor, providing collateral for a business loan might be difficult. Since a business loan is unsecured, you don't need collateral to apply for this loan.
6. Managing Working Capital
The need for liquidity is a normal feature of business. Your debtors and creditor payment schedules may differ, and you might need temporary working capital funding. With a start-up business loan, you can pay your creditors and repay the loan once your debtors make their payment.
7. Customizable Options
A business requires different types of loans for equipment, invoice financing, and term loans. You can customize your small business loan based on your unique needs and operations and compare offers from different lenders before finalizing your decision.
8. Tax Advantages
The interest on a business loan is exempt from tax. The total tax you pay as a proprietor is adjusted for the interest paid, thus bringing your tax liability down.
9. Faster Transfer
Some lenders have a mobile app where the loan amount is transferred directly to your account in a few minutes. This solves your cash flow problems instantly, and your business suffers from zero downtime.
10. Higher Credit Score
Securing a loan can give your business a credit history if you don't have one already. It can even boost your score - if you pay your loans on time. With a higher credit score, you stand to get higher loans at lower interest rates when you need them.
A business loan is a convenient way to expand your business. If you're seeking out quick and easy loan disbursement, try onthewaymoney.com. On The Way Money is your go-to place for browsing quick, hassle-free, and convenient business loans that give you the money exactly when you need it. Visit our website and select a loan of your choice to finance yourself out of a tough spot and achieve new heights.