Different SME business owners need business loans for different purposes. Despite the diversity of growing businesses, they all seem to have an underlying need for loans for common purposes. Often, it gets difficult to secure a loan because the businesses do not meet the requirements that higher financial institutions have for loans. However, these businesses can opt for online platforms such as Loan Frame. Some of the most common business needs of borrowers in India that are sought through loans include:
1. Loans against Property for Working Capital
Many start-up businesses have a challenge in that they do not have the money required to get their businesses running. Some businesses have taken off, but they do not have the working capital to keep the businesses afloat before they can start making profits. Other times, it is the need to expand in order to cater to customers’ needs that force businesses to seek out loans. These working capital loans are used for different purposes including getting raw materials that are needed for production or even paying the workforce. Loan Frame helps these businesses to get financing by opting for loans against property. This reduces the risk that financial companies are taking as they provide you with the money you need to keep your business running.
2. Equipment Purchase through Business Loans
SME Businesses apply for business loans in order to get equipment for production. For example, if a doctor is seeking to set up a consultancy, they need more than an office. If you want to attract patients, then it would be better to have equipment at your clinic as opposed to referring patients to other facilities. This would place you above other consultants who do not have the same machinery. Sometimes getting these loans becomes difficult because the business has not met the minimum time period of operations as stipulated by a financial institution. Loan Frame steps in to structure such applications, making them appealing to financers who then provide the money you need.
3. Getting Office Space through Mortgage Loan
Some businesses would like to get assets through business loans. In this case, the SME has to have a good track record as evidenced by a good credit score. It also needs to generate stable profits to show the capacity to pay back the loan. In such cases, business is unable to get an unsecured loan because of the risks that are involved on the lender’s part. Unsecured loans are secured for smaller amounts of money and for businesses whose owner has a very high CIBIL score.
SME businesses have many needs that they can only meet through business loans.All of these needs fall into three main categories: asset acquisition such as acquiring office space through a mortgage loan, working capital and purchasing of equipment. Every business that seeks to get a loan must be able to explain why they need the loan and what they are going to use it for in addition to meeting eligibility requirements. Loan Frame experts help you in structuring your application in a way that will get you a loan from a reputable financial institution for lower interest rates than you expected.