Top 5 Reasons to Take a Business Loan in India
The decision to take a business loan is faced by many business persons and professionals like doctors and chartered accountants. It is not an easy decision to make when planning a business loan. Once the loan gets approved, you have the monthly instalments to contend with for the loan tenor. You also need to ensure that the loan amount is sufficient to meet your business requirements.
As a businessperson or a professional, you would know these concerns are a part and parcel of any decision you will take with regard to business goals and achievements. A business loan can help you in several ways, but we are only sharing the top 5 reasons why you should take one.
Achieve your business growth plans
The goal of a business is to keep moving forward and to do that your business needs to grow. While you are providing top-notch products and services to your customer, you also need to keep investing in market trends like a new laser machine for an eye doctor’s clinic or a new marketing campaign for a brand. The bottom line of your business scorecard can increase if you have the funds to finance new equipment, invest in inventory or meet your advertising and marketing expenses.
Business and professional loans can help meet unexpected expenses
Every businessperson or professional has faced unexpected expenses – issues with a piece of machinery, the need to hire a person on a higher salary, losses incurred due to theft, natural disaster or even a lawsuit. These expenses can come on unexpectedly and without warning. In such a case, access to a business loan will help you avail the amount you need to meet such costs. You do not have to shut your business, instead, you can continue to run your business as before with the help of a loan.
Improve the cash flow of your business with the help of loans
There are so many expenses in running a business or a professional’s office. For example, payment to vendors, electricity bills, salaries to employees, and many more. With the help of loans meant for businesses and professionals, you can increase the cash flow to your business and meet these expenses head-on. The money you receive can be used to ensure that the workflow management or the overall efficiency of your business is not hindered.
Have a positive impact on the credit score
A credit score is not meant only for home loans or personal loans. It can have a direct impact on your decision to take a business loan interest rate. The higher the score, the higher the chances to get the loan approved quickly and at a reasonable interest rate. The only thing you have to remember is to pay the Equated monthly instalment or the EMI on time. Missing out on even payment will lower the credit score and you will have to pay a penalty as well.
Enjoy some tax benefits
Many tax consultants will encourage you to take a business loan for tax benefits. Mind you, there is no direct benefit on the loan amount. But, on the interest that you pay for a business loan, there are tax deductibles offered by the Income Tax of India. These will vary as per the Indian laws, and you should understand the details from your tax consultant or the customer care executive of the lending institution.
Usages of the loan
We have seen the major benefits of taking a business or professional loan, but now let us look at the myriad ways in which you can use the loan.
Expand your business – Want to set-up another office in Mumbai not that you have captured Delhi, take the loan and get started. Use the loan amount to open a branch in the same city, extend an existing business set up, plan an IPO offering and more.
Get working capital – The backbone of every business is the working capital. Use the loan to meet all your needs such as salaries, payment to vendors, daily essential payments like EMIs, rent, and others.
Build an asset – Every business can build prosperity with assets such as self-owned property or investment in other tangible assets. You can invest in a property, trademark an innovative product or service or even sue people who are misusing your trademark.
Increase your manpower – If your business is growing, you need to hire experienced people to manage client and customer expectations. If you are an architect, you may want to hire a junior architect to help you with the growing demand.
Grow your business – Business growth requires marketing. Direct-to custo-er or business-to-business needs all can be funded with business loans. You can choose for in-store displays, pay per click online, print and TV advertising and more.
A business or professional loan is so designed to bring peace of mind to the business owner and all major stakeholders. The above advantages and usages of the loan you want can really help you – but a word of caution – do your due diligence on the lending institution, the loan processes, interest payable and other factors before the final sign-up.