March 16, 2018
Entrepreneurs to fulfill their goals requires necessary finance. Adequate finance will ensure smooth functioning of business activity.
To get adequate finance at the right is very important. There are two ways through which an Entrepreneur gets Finance, through Easy Online Loan Providers like Banks and NBFCs.
These are the two institutes who lends business loan for Entrepreneurs.
Traditionally, banks were given more importance as compared to NBFCs. Even though such NBFCs have been in existence for quite a long time, their popularity grew only recently. Many businesses are now opting to borrow a loan from NBFCs, due to these advantages.
Quicker processing: Everyone knows the fact that banks are stringent about applicants fulfilling the required eligibility criteria. In case the applicant fails to meet the bank's eligibility criteria, the application is denied. However, NBFCs have a less stringent set of requirements. Besides, most NBFCs require minimal documentation. Upon successful submission of all the documents, the loan is processed quickly and disbursed in the promoter's account.
Helps with the cash flow: Business loans can be either utilized to boost revenues or to gain competitive edge. So a company may look to open a new branch, launch a marketing campaign, add to inventory for seasonal demand spikes, and so on. Any money can be good money, provided it is used efficiently and wisely. You can opt for short- or long-term financing, small loan or large, whichever works well for you. The idea is that the income generated from such avenues goes towards repayment of the loans, and leaves a tidy sum for you to use otherwise. You get to achieve your business goal without having to spend your cash.
Banks are generally the first choice when it comes to applying for loans. Their primary advantage lies in their accessibility and familiarity, especially for long-term customers. Although it is tough to get a loan approved, you carry home the satisfaction of getting away with lower interest rates. Also, unlike venture capitalists and angel investors, you need not part with either ownership or profits from businesses.
Competitive interest rates: when compared to bank, NBFCs provides competitive interest rates. NBFCs generally charge a competitive interest rate based on the business turnover. The applicant's credibility also plays a major role in determining the interest rate. A lower rate of interest indicates a lower cost of servicing the loan as a result lower Equated Monthly Instalment (EMI) amount to be paid.
Customized services: NBFCs provides customizes services to their customers they understand the applicant requirements and based on that provide services to their applicant.