Working capital

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Different Types of Business Loans

Bajaj Finserv offers various types of business loans that help cater to your various business needs. These loans fall under two board categories: term loans and flexi loans. Term loans can be either short-term or long-term depending on the tenor. While a short-term loan has a tenor of up to 84 months, a long-term one can stretch up to 20 years. In both the cases, borrowers have to pay equal monthly instalments (EMIs) throughout the entire tenor while repaying the loan. The Flexi Loan facility offered by Bajaj Finserv gives an option to borrower to pay only interest as EMIs while repay the principal amount at the end of the tenor. Borrowers also have the flexibility to pay interest only on the amount utilised and not on the entire loan amount. This facility reduces EMIs up to 45% as compared to traditional term loans.

The following includes different types of business loans and how they help:

1. Working Capital Loans

Businesses to maintain a good short-term liquidity, need to have an adequate and a constant cash flow. That’s when a working capital loan comes in handy. Meet short-term business needs like inventory and payroll costs, manage delayed payments from debtors and more with a working capital loan up to Rs.45 lakh.

2. Business Loans for Women

Unsecured business loans help women secure hassle-free finance to help their business grow. These types of small business loans available in India enable self-employment and financial independence among women.

Bajaj Finserv offers Loans for Businesswomen to boost their business growth and manage their day-to-day business functioning smoothly.

3. Machinery Loans

Whether it is purchasing or upgrading plant & machinery, businesses will require considerable funding in both situations. Machinery loans are one of the types of business finance that provides capital for your fixed asset needs.

4. SME and MSME Loans

Bajaj Finserv offers SME and MSME loans to small business owners looking to expand their operations and market reach.
Bajaj Finserv offers all of the above types of funding for businesses in a simple, quick and hassle-free manner. Pre-approved offers on business loans helps you avail instant funds with just 1-step verification.

Also Read: What is Business Loan

5. Term loan:

A term loan is a credit facility that can be repaid over a set period of time. It is available as both a secured and an unsecured facility. But the amount you can avail of generally depends on the creditworthiness of your business. The tenor for an unsecured term loan usually ranges up to 84 months while for a secured loan it is up to 144 months. You can use these funds for multiple needs of your business, like expansion, inventory purchase, paying salary to your staff, etc.

6. Start-up loan:

It is difficult for a new business or a start-up to get a loan as it lacks business vintage. In such a situation, a startup loan comes to your rescue as it is easy to avail and requires less paperwork. With a start-up loan, you can get funds up to Rs.45 lakh to finance your business expenses in a hassle-free way.

7. Loan against property for SME:

An unsecured business loan might not be enough to meet the big-ticket expenses of your business. To fulfil such outlays, you can opt for a Bajaj Finserv Business Loan Against Property for SME and get up to Rs.45 lakh. You can apply for funds against your residential or commercial property. It is important to make sure that the property you are planning to offer as collateral should be free from litigation and encumbrance.

8. Invoice financing:

Use unpaid invoices as security to get funds from a financial institution. This credit facility is called invoice financing where outstanding invoices can be used as collateral to get funds. With invoice financing, you can fulfil your business's short-term needs – purchase of raw materials, staff's salaries or other operational funds without waiting for your account receivables to come.

9. Equipment financing:

If you have a manufacturing business, you may need financial help to purchase costly equipment. Equipment financing, also known as machinery loan, can help fulfil these requirements. This high-value loan helps you buy or upgrade machinery required for your manufacturing unit. Bajaj Finserv offers speedy approval on machinery loans that come with a flexible repayment tenor of up to 84 months.

10. Overdraft:

An overdraft is a credit agreement in which a lender approves a certain loan limit for the borrowers. This credit limit is sanctioned based on your credit history, business’s cash flow or your relationship with the lender. This is one of the popular types of business loans available in India. With this financial option, you can withdraw an amount from the approved limit and pay interest only on the amount used and not the entire sum available to you.

Many lenders offer flexible forms of repayment on term loans to make the loan more affordable for the borrower. Bajaj Finserv offers the unique Flexi facility on most of their business finance solutions. It allows you to withdraw as per your needs from the sanctioned limit. With the Flexi facility, you can also opt to pay interest only EMIs for the initial part of the tenor and reduce your monthly instalment by 45%*.

11. Merchant cash advance:

A merchant cash advance is an alternative financial solution for small businesses based upon their debit/credit card sales. One of the most important features of this credit facility is that it allows you to repay the loan based on your daily sales..

12. Business credit card:

When you want urgent funds for your business’s short-term needs, a business credit card is a viable solution. You can also earn rewards on the payment completed on your debt.

13. Cash Credit

Cash credit is one of the popular business loan types in India. It is a short-term credit facility extended by financial institutions that allows you to use money without credit balance in your account. With this financing solution, you can withdraw funds from a pre-sanctioned limit as per your agreement with the lender. However, interest is charged only on the amount withdrawn and not the total sanctioned limit.

Bajaj Finserv offers several types of business loans in India to meet the needs of your enterprise. Before applying for a loan, it is vital to understand the requirements of your business and also the nature of credit. This will ensure that you have enough funds required to finance your business needs without affecting your monthly outlays much. Business owners can choose an appropriate financial solution from the above list of types of business loans depending on the nature of their expenses and budget.

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