How to Use a Chartered Accountant Loan to Strengthen Your Practice
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How to Use a Chartered Accountant Loan to Strengthen Your Practice

  • Highlights

  • Smartly manage cash flow with Flexi Loans

  • Expand operations and diversify services

  • Finance the purchase of assets

  • Consolidate your existing debt

Chartered accountants combine the skill of strategic decision-making with a deep understanding of personal and corporate finances. Depending on your specialisation, you may be an expert in matters such of tax, mergers and acquisitions, or valuation.

Since you're in the business of managing money, you know the benefits of timely infusion of funds for a firm. See how a business loan for chartered accountants can bolster your practice.

1. Finance your organisation’s working capital needs

Being a chartered accountant, you must be aware of the importance of balancing your current assets and current liabilities. Flexi Loans are the smart of managing your working capital needs of your firm.

a. Paying day-to-day expenses:

Working capital is essential for daily business operations as it is used to pay salaries, overhead costs and to repay debts.

For example, let’s assume that you have designed and printed greeting cards and ordered gift boxes for all your employees and clients to wish them the best in the New Year. You have gone all out and splurged on this, as you want to build a favourable impression with your clients. Now, you have an outstanding bill that you have to clear in 15 days. You were counting on a payment from a client, but since it is delayed, you will have to think of another way to make this payment. In such a case, a loan can help you repay your debts quickly.

b. Managing a negative working capital:

When working capital is insufficient, your practice may falter. A CA loan helps finance the unpredictable working capital needs of your business and keeps your firm running smoothly.

c. Expanding client base:

Working capital is especially useful if you are planning to take on new clients or expand, which is bound to increase your everyday cost of operations.

To meet all these needs, use a loan for chartered accountant’s flexi loan facility. It allows you to borrow as and when the need arises and charges interest only on the amount used. You can withdraw and repay against the credit line as many times as you wish to. Moreover, you can pay interest as EMIs and repay the principal at the end of the tenor. These features make a flexi loan a perfect fit for all your working capital needs.

Additional Reads: How to qualify & apply for a Bajaj Finserv Loan for Chartered Accountants

Bajaj finserve loans for charted accountants

2. Finance growth and expansion

Whether big or small, the growth of every business requires substantial finance. A Chartered Accountant Loan helps you finance the expansion of your business by giving you funds up to Rs.35 lakh. For example, if you’re diversifying from dealing with matters of taxation, to also dealing with mergers and acquisitions, you will need finance to hire more employees, buy more computers and also purchase additional software. A loan will help you meet all these needs easily. Besides this, the loan also has a flexible tenor that you can choose based on the timeframe of your expansion or your projected monthly revenues. This allows you to go about paying EMIs conveniently.

3. Furnish and design a new branch office

Setting up a new office has several expenses associated with it. Typically, you will have to spend on:

- Painting and interior decoration
- Furniture, fittings and carpentry
- Electrical work
- Miscellaneous accessories such as carpets and curtains

Instead of dipping into your business’ finances or personal savings, you can use a CA loan to furnish your office. These savings can be invested elsewhere or reserved for exigencies.

4. Finance assets

Assets are an important investment for any practice. Not only do they boost your productivity, they are also a good way to invest your money. A loan for chartered accountants can help you buy new assets like commercial space/premises, company vehicles or computers-all of which involve investment. So, if you’re moving to a new office space, for example, you can buy furniture or top-of-the-line laptops, all at once, without letting the cost be a hindrance.

Borrow as you need, prepay when you can

A Flexi Term Loan is a very efficient and smart way to tackle unplanned expenditure. When you opt for a Flexi Loan facility:

- You are given the maximum amount you qualify for.
- You can withdraw the funds you need right now pay interest only on what you borrow, rather than the whole loan amount sanctioned. The rest is available to you when you need it.
- You don’t need to apply for it again, or follow a time-consuming process to access. Just borrow more when the need crops up.
- You can prepay funds when you have excess income at no extra cost. You can even re-avail the prepaid funds if you need them.
- You can choose to pay interest-only EMIs to further reduce your cash flow management and pay off the principal at the end of the tenor.
- You save up to 45% on your regular EMIs.

5. Repay debts on time

Debts can keep piling up if they are not paid on time. Defaulting on payments has repercussions such as seizure of business assets as well as a lower credit score. A loan for chartered accountants allows you to repay your creditors on time. This maintains a positive image with your creditors and a good business relationship as well.

If you have already taken 2–3 loans in the past and have a business credit card balance that you are yet to repay, you’ll realise that the debt is mounting and that you’re paying too much as interest. In such cases, you can take a CA loan to consolidate your debt. This will help you clear it quickly, avoid late fees and maintain a good relationship with your creditors.

Limiting your long-term liabilities: The loan itself has a flexible term of repayment that doesn’t make it a liability for you or your practice.

6. Resolve unanticipated cash needs with a flexi loan

A flexi loan account for CAs can also be used to meet unexpected needs for cash. For example, if you take on a large 6-month project, you may have to hire two additional resources urgently to complete it. This wasn’t planned for and cropped up at the last moment. But, since you want to make the most of the growth opportunity, you decide to go ahead with the hiring decision. In such a case, a flexi loan allows you to borrow as much as you need from within a fixed amount, as many times as you require. So, you can use it to hire extra employees without harming your finances.

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