BEST SMALL BUSINESS LOANS IN INDIA FOR 2016 – BIG LIST

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BEST SMALL BUSINESS LOANS IN INDIA FOR 2016 BIG
LIST
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• Small business loans are the essential
  requirement for small business owners. In any
  stage of the business lifecycle, you may have
  faced the requirement of funding. Securing funds
  for a startup is one of the toughest challenges
  an Entrepreneur faces while starting a new
  business. You also must know the advantages and
  disadvantages of each funding methodology. Such
  as estimating the amount of funds required, the
  application of funds, projected financial
  position of the business including the returns
  generated and evolve a strategy. It is all
  required to approach and secure the required
  funds. Apart from angel investors and venture
  capitalists, banks are one of the largest funders
  of startups in India. They are providing funding
  to thousand of startups each year. Here in this
  article, we intend to explore best small business
  loans for Indian entrepreneurs for the different
  purposes.

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• In product based business two types of loans
  required by the owners. One is term loan to buy
  equipment and machinery. Another is working
  capital loan for stocking inventory. In service
  based industry working capital requirement is
  much higher than term loan.

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1. Term Loans

• There are different types of term loans today
  short term loans, long term loans and mid-term
  loans, which the entrepreneur can avail upon his
  requirement and financial status. The maximum
  tenure of a short term loan will be 3 years and
  for a long term loan is 10-15 years. There might
  be variations in loan interests depending upon
  the tenure of the loan
• Term loans are generally of two types secured
  and unsecured. In secured loans, the collateral
  can be a property, business premises, land or
  machinery and will attract lower interest rates
  than an unsecured one. Read More

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2. Temporary Funding

• Best Small Business Loans Usually called
  Overdraft. The word overdraft means overdrawing
  from your current account. In other words, the
  account holder withdraws more money from the
  account than what has been deposited. If the
  amount overdrawn is within the limits of a prior
  agreement, the interest will be charged at an
  agreed rate. A higher interest rate is applicable
  if it exceeds the limits. As an overdraft can be
  covered with the next deposit, it is an ideal
  source of temporary funding. An overdraft
  facility is considered as working capital loan.
  Read More

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3. Bill Discounting

• In this process you get instant cash on large
  purchases or the credit sales made by discounting
  your purchase/ sales bill at your bank. You need
  to produce the documents which authenticate the
  transaction like trade invoices, track receipts/
  railway receipts, bill of lading etc.

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4. Letter of Credit

• Letters of credit are used primarily in
  international transactions of bigger value. They
  are also used in the land development process.
  The parties involved in the issuance of a letter
  of credit are the issuing bank of whom the
  applicant is a client, a beneficiary who is to
  receive the money, and the advising bank for
  which the beneficiary is a client.
• As a letter of credit is predominantly used in
  international finance where buyer and seller do
  not know each other, the business transaction
  will be facilitated using the banks
  creditworthiness.

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-india-2016/
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