It is impossible to overlook the contribution of small business loans when it comes to starting or even expanding an organization. This financial product covers a wide array of expenses ranging from equipment purchase to payroll costs to inventory prices and much more.
However, must an organization always turn to a bank for such kind of a loan? No! In fact, it’s often easier to avail of a loan from a Non-Banking Financial Company or NBFC. Here’s why:
Speedy processing and quick fund disbursal
Several NBFCs extend business finance online. All a borrower has to do is visit an NBFC’s website, fill an online application form, submit paperwork electronically, and wait for the approval. This way, they can bid adieu to waste their precious time waiting in a queue at the lender’s branch.
Further, most NBFCs have relaxed business loan eligibility criteria, which reduces the processing time. This benefit is the reason behind the quick disbursal of funds. As a business owner, you may require funds quickly, and business finance from an NBFC ensures the same.
Flexible repayment terms and interest rates
Many NBFCs are dynamic and decentralized organizations. This lends them more flexibility in terms of negotiating repayment tenures, interest rates, etc.
The business loan interest rate is a make-or-break parameter for any borrower, and NBFCs offer some of the most competitive ROIs in the market. This leads to you worrying less about your EMI payments and focus more on growing your business.
NBFCs back MSMEs
Not many know this, but reputed NBFCs are currently backing MSMEs with special loans to expand operations. These institutions offer customized finance solutions, especially for smaller organizations.
Besides, as more and more banks are increasingly consumed by bigger organizations for loans, NBFCs are taking their place in doling out smaller loans to MSMEs.
Pre-approval of business finance
Some NBFCs even offer pre-approved business loan to several companies irrespective of their size. An organization with a pre-approved loan limit can withdraw funds as and when required, rather than taking out the entire loan amount at once. This allows businesses to pay interest only on the amount they have borrowed/withdrawn and not on the total loan amount approved by the lender.
Further, with a considerable pre-approved loan, businesses always have a reserve or corpus of funds to fall back on. And they don’t have to make multiple loan applications each time they need more funds.
To sum up
As you can see, NBFCs, with their customizable loan products and competitive business loan interest rates, have made securing finance quick and easy.
If you are looking to apply for a loan to expand your company, make sure you perform due diligence by scouring the internet for a credible NBFC. You must also tap into your word-of-mouth network of family, friends, and acquaintances before reaching out to a lender.
Also, make sure you are well-prepped to apply for business finance before approaching the NBFC. A business loan EMI calculator will come in handy in budgeting your monthly EMI burden.
So, prep your documents, ensure you have a good CIBIL score (ranging between 700 to 900), and begin your application process.