There are several types of business loans that MSMEs can avail in India that will help you to boost your cash flow. Therefore, in this article, we will list all the different types of lending solutions that you can avail from banks and the government as per your needs and business goals.
Term Loan
It is the most common type of capital lending solution in India. Generally, the period for this loan is 1 to 5 years. The capital approved for the disbursement of this type of loan depends on the credit history.
Start-Up Loan
It is exclusively for start-ups that want to start their business venture and scale their operations. Also, with this loan, the borrower does not need a long-standing business to support their application. Furthermore, even if your credit history’s health is mediocre, you can apply for a start-up loan. In this type of loan, all the critical things, such as loan amounts, tenure, etc., are decided on the projected turnover of the business.
Working Capital Loan
A working capital loan is for organizations that will help them streamline their daily business operations and never let them face any financial crunch. It is suited for those organizations facing an upsurge in manufacturing orders, exports, etc. Also, if your face is facing any downtime or financial crunch and cannot undertake more orders can access this type of loan.
Invoice Financing
Your pending invoices can be valuable assets to your organization! Suppose you have several invoices pending with a long payment date. You can use invoice financing to use these pending invoices as collateral to get funding against these invoices and repay the loan amount once your invoices get cleared. There are many NBFCs and SaaS platforms like CredFlow, which has a robust invoice financing program. Through their platform, you can finance up to 80 per cent of your invoices in only 24 hours.
Business Credit Card
Business credit card is a great option for businesses through which they will get a revolving credit line. So, a business credit is good to have if you want to expand your business beyond your imagination! Though the interest rate on business credit cards tends to be very high, solutions like CF Pay Later still offer one of the lowest interest rates in the market.
Equipment Financing
If your MSME business functions in the manufacturing sector and you need to get the latest and cutting-edge technology for your business, you can avail of this type of finance option. Therefore, your latest equipment will be held as collateral, and the same amount of financing will be credited to your account.
Loan Against Property
If your business is in a dire situation then you can avail of a loan against your property that will help you to get capital to sustain your business.
Conclusion
Therefore, in the end, if you ever feel a cash crunch in your business, there can be multiple options that will help you get out of the financial difficulties. So, all these types of business loans are geared towards to