What is a Small Business Loan?
Small and medium-sized businesses might use a small business loan to meet their immediate needs. Small business loans are the simplest to get of all the business loan types, requiring little paperwork and simple qualifying. It’s important to understand whether your business is eligible for a small business loan.
Financial institutions and banks that lend money always check credit and assess risks before approving loans. Small businesses, being risky and new ventures, are carefully examined by banks before approval. In the past, this meant that only wealthy or well-connected individuals could get business loans. However, today, to solve this problem, the Indian government and banks have introduced small business loans. These loans are designed to be quick and easy for small businesses to access.
Why do Small Businesses Need Loans?
Securing a business loan in India involves careful consideration, whether you are starting a new venture or managing an existing one. A strong business plan is essential, this plan should detail how you’ll use the capital, ensuring a return on investment (ROI) that exceeds the loan interest.
Small business loans aren’t just for financial emergencies; they’re often for businesses with high potential. These loans can help with hiring the best talent, managing inventory, purchasing equipment, advertising, and expanding operations, empowering businesses to thrive and succeed in the competitive market.
Benefits of Small Business Loans
Small business loans unlock a wealth of benefits. Here’s how they can fuel your company’s growth.
- Easy Application and Approval
Obtaining a small business loan is a quick and simple process. In as little as 48 hours, many institutions will accept and approve your loan! Completing the online paperwork takes only a few minutes and is also rather simple.
Documents that you could require are:
- ID proof (Aadhar/Passport/Voter ID)
- Residence proof (Passport/Voter ID/Electricity bill)
- Business proof (trade license/establishment license)
- Business Balance Sheets or Books of Accounts
- Past bank statements
- Business Income Tax Certificate
- Property deed (for a secured loan)
- Tax Benefits: Tax deductions are available for interest paid on small business loans. This implies that business owners may reduce the amount of tax that must be paid as income tax under the Income Tax Act of 1961 by deducting the interest paid from the total income produced.
- No Collateral Loans: Unlike most loans, small businesses can apply for loans without having to provide any collateral. This allows small businesses to get funding without putting valuable assets at risk.
- Flexible Solutions: Loans for small businesses are tailored to emerging companies. There are different types of tailored loans accessible, depending on your needs. Most small business loans also offer flexible repayment options in case you are unable to return the money within the allotted time.
The length of term, interest rate, and EMI amount can all be customised by small business owners based on their repayment capacity.
Decide What Type of Loan or Financing You Need
It is naturally your responsibility as a small business or startup owner to locate the best loan. Consequently, in order to select a business loan that will improve your company’s credit standing, you must arm yourself with knowledge about financing and business loans.
Following are the sources of small business loans:
- Bank Loans for Small Business
In India, most of the big banks have a dedicated division for funding small businesses and offer simple, flexible loans for expanding companies.
Although most of these banks have a maximum amount they will lend, the interest rates on the loans are reasonable, and they can be modified based on the owner’s ability to repay the loan and the business’s revenue.
In addition, banks offer an overdraft option and don’t need any guarantee or collateral. You can get a small business loan from ICICI, RBL, and SBI, among other trustworthy banks.
- Finance for Working Capital
This loan is used to pay for a company’s regular operations, such as buying supplies for production, importing and exporting items, and other activities. You cannot purchase long-term assets or real estate with this financing.
- Loan Term
This loan is used to grow the company, update current assets, or buy commercial real estate. Compared to other loan types, they feature a longer tenure and a flexible repayment
- Government SME Schemes
Small and medium-sized businesses (SMEs) can participate in several government-sponsored schemes to obtain easy financing, and the government of India has long promoted the expansion of SMEs in the country.
- Pure White Investments Loan for SME
In order to provide SMEs with quick access to finance for expansion prospects and to improve business stability, Pure White Investments provides specialised loan disbursal services. SMEs can obtain the funds they require to support growth projects with less paperwork. With the help of Pure White Investments distinctive products, working capital management is supported, giving companies the financial flexibility they need to successfully handle cash flow.
By partnering with Pure White Investments, small businesses can seize growth opportunities with confidence.
The Final Step of Applying for a Business Loan
Submitting the loan application form properly is the final step. This is a rather easy technique. If you are applying for a loan online, you will need to enter all of the information on your electronic device; if you are applying for a loan through a government scheme, a credit union, financial institution, or traditional bank, you will need to enter the information on a form (with pen and paper).
Even though completing the application form takes a lot of time, it is quite worth the effort at the end of the day.
Conclusion:
Pure White Investments is eager to help if you need a small business loan to launch or grow your business. Expanding your small business is easy and stress-free with our flexible repayment options, fast funding availability, and uncomplicated application process. Take the required steps towards growth rather than worrying about how you’re going to finance your next move in business. With Pure White Investments’ small business loan, you can pursue your business goals with confidence, knowing your financial needs are covered.