Most businesses require a lot of money to operate and function no matter which type of industry they are in.
There are certain instances where proper financial backing is required such as investing in technology, expanding the organization or even managing the cash flows. For many business owners in India, secured business finance is an easy way to get the required funds to support their business as this seems to be one of the easiest ways to get funds.
This article serves as an extensive guide dedicated to understanding the principles such as the advantages of secured business financing, and how it can enable Indian businesses.
Secured Business Finance
Secured Business Financing is an unsecured loan or a credit facility where assets such as property, machinery or other valuables are provided as a guarantee to the lender. This lowers the risk for the lender, hence making businesses able to approach these loans at lower rates of interest.
Indian businesses find secured loans easy to obtain financing because most Indian lenders offer:
1. Lower Interest Rates: Lenders seem to lower the rates and offer better terms as the risk is lower.
2. Higher Loan Amounts: Where businesses can secure larger funding amounts; it is often backed by valuable collateral. /p>
3. Flexible Tenures: Where a borrower can plan for the recovery periods that work best financially.
Why Opt for Secured Business Finance?
Loan businesses offer the distinct advantage of being wedged with collateral. Below are key reasons why it is your ideal pick if you have an Indian enterprise:
1. Loan Affordability: One reason they are preferred is that they are cheap. This is largely because of the collateral that is involved, which widens the spectrum of interest rates.
2. Dominance over Available Funds: As lenders tend to be more generous while giving out secured loans, they come in handy to businesses which aim at raising funds for purchasing equipment expansion or any other projects. /p>
3. Versatile Loan Payment Plan: Businesses can realign their payments on the loan with their earnings and revenue which allows for better flow of finances and cutting down the financial burden.
4. Better Rating Hold Position: Your business credit would receive a boost as now you stand to repay the secured loan which in turn makes it easy for you to seek further loans.
Different Models of Secured Business Financing Solutions Available Secured Business Financing Solutions of Indian Businesses
In the business world, it is imperative to have a sound funding strategy; however, securing financing is often a problem for many firms. The only thing that stands between the business plan and securing sufficient funding is the paperwork, and Indian corporations are able now secure business financing solutions that best fit their needs, here are some alternatives -
1. Term Loans: When one can provide fixed assets as collateral like a factory, a Term Loan comes in handy. This is also helpful in increasing the fixed assets of the company, particularly where the investment policy aims at building new factories.
2. Loan Against Property (LAP): In the case of investments in business as well as in residences, it is proper to have the capital available, thus this is where Loans Against Property LAP can be utilized.
3. Equipment Financing: It could also be in a position where the new assets are purchased with the borrower’s own money; fresh assets can be funded by seeking finance with the help of the fresh assets as collateral that has to be placed to get the finance.
4. Inventory Financing: Aside from the negative aspects of inventory, it has the positive side of assisting a company to finance its working capital needs; for instance, when demand for the company's product or service spikes. This also aids in improving the company's cash flow.
Stages In Secured Business Mezzanine
To let you have access to secured business finance, a lot of thought and planning is required, and it is not that easy. This is the process:
1. Establish The Need: Try to determine how much of the loan is necessary. By doing this, it helps to explain the reason why specific loans are sought in the first place.
2. Let Sprout and Use Your Collateral: Assess your current portfolio and determine the assets you are willing to use as collateral for the loan. It is wise to ensure that the value of such assets is at least equal to or higher than that of the loan amount that you want to apply for.
3. Identify the Various Lenders: Don't limit yourself to one lender. Doing a comparison evaluation among various lenders by comparing their rates and conditions is advisable. It's not only banks which are in the picture but also NBFCs.
4. Arrange your own Documents Form: Give in every important document which is required for the processing of the application like financial documents, collateral security and tax returns which would be stated in the application.
5. Delivery Of the Application Form: Having filled out the application form for the loan including all the required documents it is evident that the applicant wants the borrower to go through their security and other aspects of the loan.
How does DealPlexus assist?
For Indian Companies looking for business debt options, DealPlexus is the partner you are looking for. With a custom approach to all unsecured business loans, DealPlexus puts the business in touch with the best-suited lenders for the requirement. Whether it is for direct business expansion or just maintenance funds, Deal Plexus guides through the cumbersome procedures and gets the best options from the rest.
With their knowledge and connections in the market, it is easier for the companies to get the finances required while concentrating on their core business activities, which is to expand their businesses.
Conclusion
Secured Business Finance for Indian Companies is a requisite if you want to expand or get your company to a stage between turmoil and order. When companies can use their assets as collateral, they will surely find cheap and less restricted funds available. From a term loan to an inventory loan, there is a host of options available to ensure that every business gets what works for them best.
We connect with a trusted network just like DealPlexus does, which makes the process smooth and provides solutions according to your business needs. Limitations of funds should not discourage you from financing business opportunities, get secured business finance now and see what your business can achieve.
