Unsecured Small Business Loan

A business needs working capital to set-up or grow its position in the competitive market. Money makes your business go that’s why working capital is very important to serve the purpose of running a business. However, if the business is going through any financial crisis then there are options to overcome it. By arranging funds through bank or financial institutes may be a good choice for your day-to-day operation during the fall. It will also help in the healthy cash flow of the business.

Unsecured business loan is a popular way for the people who want loan without any collateral or security. This type of loan can be availed by self employed individuals, professionals, sole proprietorship firms, partnership firms, and private limited companies. We also call such loan business installment loan, which is an unsecured or collateral free loan to business. These loans help you to fulfill your business requirements, be it working capital requirement, business expansion, equipment financing, supplying, advertising, cash flow, payroll, or unexpected bills. Some businessmen also avail the service of unsecured loan to increase their business volume.

Since, banks and financial institutes offer the unsecured business loan, they follow certain procedure for approval. So, the credit history of a business firm or individual professionals plays a very major role in this. Person with good credit history can easily avail this loan, as such loans do not backed by collateral. The criterion to get an unsecured loan is not only the status of the business but the personal status of finance and capacity of repayment. Because the lender can only rely on the borrower’s past borrowing and repayment habits to determine if he is likely to repay the loan. They also impose high rate of interest and short time period for repaying the amount.

On the other hand, secured loans need security or collateral against any business loan. They are easily or conveniently offered in the market. However, the accessibility of getting a secure or unsecure loan depends on the business history and the credit rating of the business.
Moreover, unsecured loan also involves high degree of risk for the lender because it doesn't have any thing as a security for recovering its money. That’s why the lender lends a small amount of money at a higher rate of interest to its borrowers. But, in case the borrower is unable to make the repayment then the owner of the loan has no way out to collect it other then a bad credit score on the credit file.

As getting the unsecure business loan involve many factors but it is not easy for a new businessmen. It often grants to an up-coming or established businessmen. Never the less, by applying for such loan a small business enterprise already takes a first step towards the achievement of its financial goal. Which will lead it to success.

Loans for Women

Not only if you are a businessman can apply or get a loan, but in India, women are equally entitled to get business loan. There are not many women with the knowledge, to take advantage of loans offered by public sector banks. Indian business women are still a minority. The awareness among women about loan products to set up small enterprise is extremely low. However, things have definitely changed over last 25 years since the time the first business loan scheme was introduced exclusively for women. A few Indian Public Sector Banks( PSBs) play an important role. State Bank of India (SBI) Stree Shakti package scheme was introduced with the aim to get loans for women who are keen to start-up a business. Punjab National Bank (PNB) also runs a scheme Mahila Udyam Nidhi Scheme which is beneficial in a same concern.

The business loan through such schemes is possible only as in when women fulfill the following conditions:

A woman or the housewife must be aged 18 years or above, must have lived in a place for more than six months, she must not have been a member of any industrial cooperative society and not indebted to any cooperative or state agency. Saving fund account with the bank is a must. In which she has to deposit fortnightly an amount after her working and living expenses.

You are ready to start your business but the knowhow to take loan is still a question.Indian nationalized banks offer loan schemes through which women can start-up new scale of manufacture, preservation, and processing of goods.

Bank of India’s, Priyadarshini Yojana scheme, no collateral security is required for loans up to Rs 5 lakh and for small-scale industries (SSI) units and there is a relief of interest rates from 0.5% to 1 %. Similarly, Oriental Bank of Commerce’s Orient Mahila Vikas Yojana scheme, there is upto 2% concessions and no collateral security for loans upto Rs.10 lacs and in case of SSI no collateral security required up to Rs.25 lacs.

So, it is advisable that they should explore more before starting a new business assignment as there are many banks those not only provide special counseling for women entrepreneurs but also offer training how to market their products.

Women entrepreneurs face many difficulties to get ahead their life in business and are suffering from insufficient financial resources and working capital which leads to lack their external funds. However, knowledge of technical changes, new market trends, participation in decision making, and education can always be a plus point to run a business.

To conclude, government should bring in more and better facilities and schemes to motivate women to engage in small scale businesses.Right efforts from all areas can be a key factor for the development of women entrepreneur which leads to their active participation and knowledge in business activities.

Corporate Credit Cards

It is an indisputable fact that now a days credit cards play an important role. Banks offer different kinds of cards like credit cards, debit card, pre-paid cards, and business and travel corporate cards. Not only the individuals but the small businesses are also availing the benefits of business credit cards. The market of small business credit cards is growing fast. Banks and credit card companies have certainly seen market growth in small business industry.

These types of cards can only be applied by a business  entity.  However, they can be issued after credit assessment of the corporate; who in turn defines the limit on individual cards. Corporate cards can be issued to companies, partnership and proprietorship firms and registered institutions and societies. Moreover, the following documents will also be needed at the time of applying:

a) Last 3 years audited Balance sheet and P&L A/c copy;
b) Undertaking letter;
c) Memorandum of article & association;
d) PAN card of company;
e) Board resolution;
f) IT return of company;
g) Photograph of applicants.

Banks offer cards with some appealing features and the card holders can get exciting offers on travel, entertainment, and dining. Usually along with the cash back program they also have point system reward. It can be the best choice for the people who travel a lot.  Card members can earn and redeem points for rewards also through entertainment and dining,

Corporate cards often have additional benefits, such as specific levels of insurance when renting vehicles, travel insurance, lost card etc. But the provision varies from bank to bank.

Make use of online options to get the corporate credit card.
Using internet or online service is the market’s latest trend so to make pace with the developed technologies; there are some accessible websites which avail the information of various banks and credit card companies. So, the companies interested in corporate or business credit card can decide for the best suitable option.
Online services may also help in many other ways e.g. to provide detailed online account which can be used to access your credit balance, quarterly and yearly statement, making online payments, and  redemption of rewards and points. Thus, the credit card companies are making it easier to use the cards, and much of the account management can be handled online.
When it comes to credit card bills there are ways to make the payment such as: ATMs, Net Banking, money transfer, standing instructions, payment by cheque or in cash.
           
Other advantage which a company can get is that keeping a track of costs. Company will be able to track travel, entertainment, and other expenses and assign individual employee a spending limits. It will be beneficial to manage and control the business travel- related and other expenses more efficiently. It is a convenient way to manage the company and the employee’s business expenditures. It also makes accounting and tax monitoring easier

In case, you happen to lose your Card, report your bank and card will be immediately blocked.  After reporting the loss, you carry zero liability and any fraudulent transactions will be borne by your bank.

We understand, to choose from the vast number of corporate credit cards can cause quite a confusion. So, no matter what card you eventually choose but make sure it must accomplish the needs of your business.

Business Plan for loan

If you dream about starting a new business or expanding your business, well, you will need money in both cases to make your dream come true.

Thinking of getting a bank loan? Yes, you will need a business plan to get a loan!

First and foremost, getting a bank loan particularly for a start-up business is not easy.You are asking for a lot of money to start-up or expand your business with the motive of getting return on the investment. But, you simply cannot walk into the bank and ask for it. You have to have a plan for that i.e. a Business Plan for your business project. A formal business plan helps you to be focused. It is always advisable to do your homework before you ask for a loan.

Whether it is a start-up business loan or a loan for expanding your existing business, it is important to plan that how much exact money you need? And how you plan to use the money? In case of business expansion, it is necessary to assess the current state of your business and the key areas that require funding. In addition, if there is any collateral or security that you are willing to place against your loan.

Every business plan has to include task, deadlines, date, forecast, budget, and metrics and the content of your plan should match the purpose. However, a plan includes components such as executive summary, description of the company, product or service, market, management team, and financial analysis.

Executive Summary: It is the most important part of your business plan, which will be overviewed by the lender and management (in case of an existing business). You can either discuss it in the beginning or at the end of business plan.

Description of the company: It is indeed required to get information on history, legal establishment, and start-up plans of the organization.

Product and service: Then comes more information on what you are selling. The product and service you want to offer to the market.

Market: Market analysis will help you to know the kind of role your company will play, and the demand for products and services. It will also describe the customers’ need and the ways to reach them.

Management Team: It is a team of key members their background, list of investors, and business strategies.

Financial Plan: It includes planning of funds, type of structure, break even analysis, and policies for a start-up business. Where in, a profit and loss statement, balance sheet, and cash flow will also be required for the existing one.

As, “what, when, who, and how much” has already been discussed above the other important thing is the flexibility of a business plan. One cannot be rigid while implementing a business plan. No plan is good if it is inflexible. Though, a good business plan does take time, but make sure that you create one properly.

Therefore, A Business plan ought to be developed by every borrower to get the desired amount of loan from a bank or lender.