As a small business looking for business financing, there are many kinds of loans for you to choose from. The type of loan you get will depend on two things:
- What collateral can you offer the lender as security?
- How will you use the loan?
Knowing these two things before you apply for business financing makes the selection process easier for you.
What are the financing options available for small businesses?
- Unsecured Business Loans
- Secured Business Loans
- Loan Against Property
- Working Capital Loans
- Machinery Business Loans
- Overdraft Facility
- Commercial Credit Cards
What is an Unsecured Business Loan?
An unsecured business loan is one where a lender gives you a loan without any security. Due to this lack of collateral, lenders will lend smaller loan amounts, at slightly higher interest rates, for short loan tenures because lenders take on considerable risk when lending without any collateral.
These are perfect for small businesses experiencing growth fast or small businesses looking to build their credit history by taking short-term loans and repaying them quickly. As you build your credit history, you will be able to borrow larger loan amounts at lower interest rates.
CreditEnable SME customers have procured unsecured business loans starting from Rs. 1 Lakh in as little as 2-3 days, at interest rates starting at 14%.
What is a Secured Business Loan?
When you apply for a loan and offer the lender collateral in exchange, it’s known as a secured business loan. When compared to unsecured loans, lenders will give small businesses larger loan amounts at better interest rates and longer loan tenures for secured business loans. This is because the collateral provides the lender with some assurance that you will honour the loan terms and make your EMI payments on time. If this does not happen, and you default on the loan, the lender will take possession of the collateral and sell it to recover its losses.
At CreditEnable, we have helped SMEs access secured business loans ranging from Rs. 15 Lakh – 15 Crore, at interest rates starting at 14%.
What is a Loan Against Property?
If you own a residential or commercial property that you can offer the lender as collateral, you get a Loan Against Property (LAP). Lenders will give a higher loan amount, lower interest rates, and a longer loan tenure when you put up property as collateral.
When you apply for a LAP, lenders will evaluate your collateral and offer you a percentage of its current market value as a loan. A LAP is the perfect type of loan to meet your long-term financing needs or if you need to refinance an existing loan.
CreditEnable works with our lender partners to get our SME customers up to 70% of the value of their property.
What is a Working Capital Loan?
A working capital loan will help you cover your daily expenses like paying salaries and suppliers and other overhead costs involved in running a business.
Such loans help you streamline your cash flows during slow periods and help you cover expenses without selling or mortgaging any assets. Some lenders may even give you a loan against your Accounts Receivables, where you pledge your invoices in exchange for immediate funds.
CreditEnable customers have gotten working capital loans ranging from Rs. 15 Lakh – 15 Crores at interest rates starting at 14%.
What is a Machinery Loan?
You should get this business loan if you want to invest in new business machinery or repairing machinery you already own.
Investing in new machinery is always a great idea. It improves your production capacity and quality and may also bump up the valuation of your company in case you’re looking for investors.
CreditEnable helps SMEs get machinery business loans starting at Rs. 15 Lakhs.
What is an Overdraft Facility?
An overdraft is a type of business financing where a lender approves you for a loan with a set upper limit on the amount of cash available to you. The loan also has a set interest rate and loan tenure. Based on your needs, you can borrow money from that overdraft up to the sanctioned limit, and you will only be charged interest on the amount used.
An overdraft is a great option for any small business to have as an emergency fund or to cover short-term expenses without paying interest on the entire sanctioned loan amount.
The overdraft amount available to an SME borrower is determined by your financial history and the health of your business.
What is a Commercial Credit Card?
A commercial credit card is a credit card issued by a business for its employees to use when incurring an expense on behalf of the company. It is an easy way for the employer to collect all employee expenses in one place, eliminating the need for the employees to use their own money to pay for something, then applying for reimbursement later.
Commercial cards allow businesses to analyse all their expenses and use that information to develop a more accurate budget informed by the data.
Why should I apply for a business loan with CreditEnable?
- We partner with over 25 leading lenders in India, including ICICI Bank, Kotak Mahindra Bank, Lendingkart, to get our SME customers the right business loans for their needs.
- Our smart algorithms sort through over 100 specialized SME loan products to find you the right small business financing option.
- We’ve made the process of applying for small business funding easy and quick.
- Our service is 100% free to use for SMEs.
- Our process is digital, saving you from wasting time and effort going from one lender to another.
- We tell you upfront what documentation you will need to provide for the business loan, and we collect all the documents in one go.
- Applying for small business financing with CreditEnable has ZERO impact on your credit report. We only do a soft pull of your Experian credit score.
- If you’re not eligible for a business loan today, we’ll tell you why and what to do to become eligible in the future!
- We have helped SMEs get unsecured business loans in 2-3 days and secured loans in 7 days!
Zero Hassle. Zero Fees.
Business Loans. Enabled Simply.