How a Business Loan Can Transform Your Start-up?

Managing a start-up is exciting, but it requires regular cash flow to handle operations or expand. One preferred option to raise capital is to take a loan for business. A Business Loan is specifically designed for MSMEs looking to grow their operations. They are ideal for various purposes, such as market expansion, new equipment purchase, staff hire, etc. Let’s learn how a Business Loan can transform your start-up and take it to the next level.

What is a Small Business Loan?

A small Business Loan is available for micro, small, and medium enterprises (MSMEs) to cover various financial requirements. However, they are not only accessible to MSMEs. Women entrepreneurs, small business owners, partnership and proprietary firms, and self-employed professionals may also borrow them. The loan amount, interest rates and repayment tenures differ between lending institutions. They usually depend on your credit score, revenue, profit and business cash flow.

Largely, NBFCs like Hero FinCorp offer these loans without collateral. Moreover, you can use the loan amount for any business purpose as per your requirements.

Possible Ways to Use a Business Loan

Once you obtain a Business Loan, use it wisely to impact your growth trajectory. It is an opportunity to invest in the company’s long-term growth and ensure stability. Here are a few ways to use a Business Loan to transform your start-up into a successful endeavour:

Expand Operations: Business expansion is crucial for a start-up’s growth. Whether you want to open a new office, increase production capacity, launch a new product line, or enter a new market, it requires capital that you can easily obtain through micro loans. It provides enough funds to cover the costs without disrupting the cash flow.
Hire Essential Staff: Efficient staff is the backbone of a start-up. More staff might be necessary to handle the increasing workload with business growth. A small loan for business gives you sufficient funds to hire top talent without stressing your finances.
Increase Inventory: If your business is involved in manufacturing or retail, you must maintain adequate inventory to meet customer demand. A Business Loan provides funds to purchase bulk inventory at discounted rates. The loan amount prepares you for the peak seasons or expands your product line to cater to a broader customer base.
Enhance Marketing Efforts: Visibility is important for any start-up’s growth. Effective marketing is necessary to increase your brand’s visibility. In a business, it’s important to retain existing customers and attract new ones. Finance your marketing campaign with a Business Loan and build your brand’s presence in the competitive market space. Make use of digital marketing, traditional advertising, public relations, and social media promotions to reach out to your customers.
Upgrade Equipment: Outdated equipment hampers your start-up’s product quality and efficiency. Use a Business Loan to upgrade your equipment to streamline your production process. Enhanced product quality and increased operational efficiency give you a competitive edge in the industry.

Business Loan Features that Favour MSMEs

A Business Loan is a financial product that raises capital for business expansion. Here are some features of Business Loans that favour Indian MSMEs.

No Collateral Requirement: For secured loans, you must own an asset greater than the loan value to raise capital. However, micro loans usually do not require security by collateral. Lending institutions determine your loan eligibility based on your business performance, vintage, turnover, etc. Therefore, financing a small business’s growth becomes easier with these loans.
Competitive Interest Rates: Most lenders offer low-interest loans based on your eligibility and repayment capacity. If you fulfil their eligibility conditions, you may get approval at competitive interest rates almost instantly.
Quick Approvals: Operational delays due to insufficient funding negatively impact business performance. Quick Business Loan approvals ensure you get the funding in time to finance a project or grab an opportunity.
Convenience: A Business Loan offers the convenience of online application procedures. You may use the lender’s website to access funding from the comfort of your office. You can apply for a loan online, receive fast approval, and get disbursal quickly.
Extended Tenure: The loan EMIs should not drain your financial profits. With an SME loan, you can choose a repayment schedule of up to 60 months based on your cash flow and repayment capacity.
Simplified Documentation: Lending institutions require essential documents only to process loan applications. You don’t need to visit the lender’s office to submit the documents. Instead, upload documents online to initiate the loan process.
Higher Loan Amounts: You might need sufficient finance to meet working capital needs. At Hero FinCorp, you can access a Business Loan of up to Rs 40 Lakh. Use this amount to cover any business-related expenses. However, the final loan amount you get will depend on your eligibility, business vintage, and credit history.
Customisation: Unsecured Business Loans allow loan customisation as per your needs and repayment capacity, ensuring they meet your needs without creating a financial burden.

How to Apply for a Business Loan?

Follow these steps to apply for a Business Loan with Hero FinCorp online:

Visit the Hero FinCorp website.
Go to the Business Loan page and click Apply Now.
Fill out the essential fields and upload relevant documents.
Enter the loan amount and tenure.
You will get a reference number if your information meets the eligibility requirements.
A representative will contact you for additional information.
Post verification, you will receive a personalised loan offer with loan amount and interest rate.
After approval, the loan amount will be disbursed to your bank account.

Micro loans are ideal for MSMEs to meet their requirements. You can apply for the Business Loan online. NBFCs like Hero FinCorp sanction and disburse these loans quickly. You can customise the repayment schedule according to your business cash flow cycles. You don’t need to visit the lender’s office. The NBFC offers loans of up to Rs 40 lakh without any collateral.

Disclaimer: The information provided in this blog post is intended for informational purposes only. The content is based on research and opinions available at the time of writing. While we strive to ensure accuracy, we do not claim to be exhaustive or definitive. Readers are advised to independently verify any details mentioned here, such as specifications, features, and availability, before making any decisions. Hero FinCorp does not take responsibility for any discrepancies, inaccuracies, or changes that may occur after the publication of this blog. The choice to rely on the information presented herein is at the reader’s discretion, and we recommend consulting official sources and experts for the most up-to-date and accurate information about the featured products.