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Home » Are you an aspiring entrepreneur? A start up Business Loan is your way to go

Are you an aspiring entrepreneur? A start up Business Loan is your way to go

business loan

India has produced great talents who have built a global reputation and made the country proud. The development of global leaders in India continues unabated. As a result of their exceptional talent and sharp minds, Indians are quickly becoming major world leaders. Among the many names that have helped promote Indian talent around the globe are Satya Nadella, Arvind Krishna, Sunder Pichai, Nikesh Arora, Vinod Khosla, and the most recent addition, Parag Agrawal. Talented Indians have demonstrated the ability to maximise limited resources

Financial resources are needed to support Indian talent. Many schemes have been launched by our government to support young talent. In 2016, the government announced and launched a new initiative called Start-up India, Stand-up India. Through this initiative, the government aims to support the youth and help them become business entrepreneurs. As part of the scheme, banks provide the needed capital to help the youth start businesses in India and create jobs.

The role of startups is pivotal in creating jobs, improving our economy, and fostering competition. One of the important components of start-ups is innovation as fresh talent comes with many business ideas and helps create the desired wealth for the nation. As well as strengthening established markets, startups create new markets, niches, and sub-niches by providing the desired goods and services. Start-ups need a multifaceted strategy to improve access to financing, talent, and markets. Public sector units have to deal with red tape to do their work, which not only reduces efficiency but also reduces the opportunity to meet market demands, creating a gap between demand and supply. A start-up fills the void.

To help Start-Ups grow, the government offers several schemes to help them.

Some of the Schemes are mentioned as follows

Credit Guarantee Scheme (CGS)

Pradhan Mantri Mudra Yojana

National Bank for Agriculture and Rural Development (NABARD)

Coir Udyami Yojana

Stand-Up India Scheme

Market Development Assistance

Coir Udyami Yojana

What are the factors considered for applying for a start-up business loan?

Identify the Loan amount you need

Check your Credit Score

Check for the options of the loan

Identify the loan amount you need: While it is a good idea to ask for a loan amount slightly higher than what you require, one should strive to stay within the allotted amount. Extra funding can benefit your company in many ways, but you should be aware that the loan interest rate will be higher. Before applying for a new company loan, it is always a wise idea to calculate the loan amount you require. Be sure to budget for all of your company’s costs, including labour, transportation, and any ancillary charges. You will have a better sense of the required loan amount once you have this prepared.

Check the Credit Score: Credit score is one of the important factors to be considered for the loans getting approved. Lenders frequently use credit scores to assess your financial risk. Based on the data in your credit report, credit scores are determined. When granting new or additional credit to a consumer, lenders are typically less risky when the consumer has a higher credit score. Before applying for a business loan by any Start-Up, make sure that you are paying your bills on time and that there is not any challenge that is impacting your credit score adversely. Check for the best option: A business loan can be acquired in many ways. Both Banks and nbfcs offer business loans to start-up companies.

Check the alternate options of the Loan: In India, you can apply for start-up company loans from both banks and non-banking financial institutions. Each corporation, however, has its own set of interest rates, tenures, schemes, and other things. Make sure the financial structure of your application for a business loan corresponds to your preferences. Note down the interest rates and the other options which can have a detrimental impact on your repaying options, filter the options that do not suit the purpose and select the best options available.

Business Loan Option and the Tenure option available: You must plan your loan well, just like any other business endeavour. Plan your term based on the highest possible cash flow for your company. Find loan terms that can accommodate your monthly payment capacity after you are aware of it. Using an EMI calculator is a reasonable option to consider.

The loan term should be adjusted till it comfortably corresponds to the company’s capacity for payback. At this point, it’s also crucial to choose lenders who give you the option of choosing a longer, more flexible tenor.

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