How Can a Gold Loan Help You Start a Small Business?

Know how a gold loan can help you start a small business with loans starting from Rs. 5,000 up to Rs. 2 crore.
How Can a Gold Loan Help You Start a Small Business?
2 min read
21 May 2023

Starting a new business can be an exciting but challenging experience that often requires significant financial resources. For aspiring entrepreneurs, finding the right funding can be difficult. Fortunately, there is a popular and highly effective solution that can help you overcome this hurdle: a gold loan. Gold loans for small businesses can be a quick and efficient way of securing the funds you need, with gold loan interest rates starting at just 9.50% p.a.

How gold loan helps you start a small business?

1. Immediate access to funds

One of the biggest advantages of a gold loan is the instant access to funds that it offers. Unlike traditional loans that often involve lengthy approval processes, a gold loan allows you to leverage the value of your gold jewellery quickly. By pledging your gold as collateral, you can obtain the necessary funds to launch your new business venture without the delays that come with other financing options.

2. Collateral-based borrowing

Gold loans are secured loans that use your gold jewellery as collateral. This collateral-based borrowing allows lenders to offer loans with more favourable terms, such as lower interest rates and multiple repayment options. By utilising your gold jewellery, you can access the funds you need to kickstart your business while enjoying the benefits of a secured loan. With gold loans you are able to get the funds you need without compromising the ownership of your gold jewellery.

3. Higher loan amounts

The loan amount that you can obtain through a gold loan is primarily based on the value of the gold you pledge as collateral. Unlike unsecured loans, lenders are more willing to provide higher loan amounts with gold loans. Bajaj Finance, for instance, offers gold loans starting as low as Rs. 5,000 and going up to a substantial Rs. 2 crore. This makes gold loans an ideal choice for entrepreneurs who require significant funds to set up their new business, purchase equipment, stock inventory, or cover initial operational costs.

4. Minimal documentation

Opting for a gold loan has the added advantage of having simple eligibility criteria. Unlike traditional loans, you need not worry about your credit history or CIBIL score. Lenders require only your KYC documents, such as your Aadhaar card, voter ID card, passport, or driving licence.

Additionally, you can use the free online gold loan calculator offered by Bajaj Finance to determine the loan amount you require based on the weight of your gold jewellery before applying for a loan. With just a few straightforward inputs, the calculator can provide an estimate of the amount you can borrow and at what interest rate.

5. Flexibility in loan repayment

Gold loans offer multiple repayment options to accommodate the unique needs of entrepreneurs. You can choose a repayment schedule that aligns with your business's cash flow, allowing you to comfortably manage loan repayments without straining your finances. With the option to pay only the interest during the loan tenure and settle the principal amount at the end, you have the additional flexibility in managing your cash flow. You can also choose to pay your interest monthly, bimonthly, quarterly, half-yearly, or annually.

6. Protection of gold jewellery

During the loan tenure, the pledged gold jewellery is kept in a highly secure vault under 24/7 surveillance. This ensures the safety of your valuable gold jewellery while you focus on building and growing your new business. Once the loan is repaid, the lender returns the pledged gold to you, allowing you to regain complete ownership. Also, when you opt for a Bajaj Finserv Gold Loan, you also receive free insurance of gold, which provides added security.

A gold loan can serve as a valuable tool for entrepreneurs looking to start a new business. With its immediate access to funds, higher loan amounts, minimal documentation requirements, and flexibility in loan repayment, a gold loan provides the financial support you need to turn your entrepreneurial dreams into reality. By exploring this financing option, you can overcome the initial funding challenges and embark on a journey of building and growing your new business.

Apply online for a gold loan today


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Frequently asked questions

How does the interest rate for gold loans compare to other types of financing for small businesses?

The interest rate for a gold loan for business is generally lower compared to many other types of small business financing. It is a secured loan backed by your gold jewellery, starting at just 9.50% per annum, making it an affordable choice for entrepreneurs seeking funds to grow their business.

Can a small business apply for a gold loan even if they have a limited credit history or poor credit score?

Gold loan can helps start a small business, even if you have a limited credit history or a less-than-perfect credit score. Since the loan is secured against your gold jewellery, your credit score is not a crucial factor. This makes gold loans a simple and quick way to fund your business.