5 Ways to Make a Personal Loan to Kickstart your Small Start-up
Small businesses have gained enough momentum over the last decade or so to become one of the biggest employment generators. Collectively known as Small and Medium Enterprises or SMEs, most of these smaller businesses are startups owned by entrepreneurs.
One consistent issue that many first-time entrepreneurs face is the difficulty to obtain a financial advance. Most financial institutions mandate a business to offer at least 3 years of operational experience to be eligible for a financial advance.
Although it is obviously considered that businesses avail business loans, entrepreneurs often resort to short-term personal loans to solve their business requirements.
But, entrepreneurs must maintain a CIBIL score of 750 and above to prove their creditworthiness. Such loans do not mandate business vintage and other similar requirements.
NBFCs can even help you utilize the loan within 24 hours of approval. The process of application is also very simple. They also provides pre-approved offers on personal loans, business loans, home loans, and a wide variety of financial products.
These offers not only simplify the entire process of availing a loan but also saves you time. Simply submit a few details online and check your pre-approved offer.
Once you have decided to take a loan, you can consider these 5 ways such advances can help your business grow.
These loans can be used for any purpose
Personal loans do not have any end-use restriction. So, you can utilize the advances as per your requirements for a variety of purposes.
Try and seek loans from lenders who can provide instant personal loan at competitive interest rate along with minimal time. You can use the funds available to act as an initial investment.
Improve your creditworthiness
Unsecured loans are collateral-free, hence require minimal documentation. Remember to check your credit score before you apply for a personal loan in order to avoid rejection. Leading NBFCs also provide online eligibility calculator which aids in checking your loan eligibility.
Apply for the amount you are eligible for and repay timely. This way, you can improve your CIBIL score and market creditworthiness. As such, you make a name for yourself in the market.
On building positive market repute, sky is the only limit for your company.
Invest in technology
When you invest in technological innovations for your new business, you are making a long-term commitment to take your mission forward. For example, if you have a small precision machining business, you can invest in:
- World-class technology
- Better safety equipment
- Branding and advertising
Just make sure you check the eligibility criteria for personal loans before you apply for one.
Investing in technology is always a business advantage for smaller organisations as they have to keep up with competitors, many of which are bigger companies. Technological advancements always help smaller organisations add value to their consumers.
Develop infrastructure
A personal loan will also help you develop your organisation’s infrastructure. You can move to bigger offices, appoint more people, automate some of the components in your business process, and purchase the latest gadgets.
Since many businesses nowadays are dependent on the Internet, you may develop your own app to reach out to customers easily.
The availability of mobile phones means that most of your customers may not visit your office premises personally; they may rely on your company’s app.
In many cases, a personal loan acts as a savior. The repayments can be made through affordable EMIs and part payments can be done whenever you have excess money in hand.
However, you must know how to calculate personal loan EMI, for which an online EMI calculator is often very useful. Know your EMI before availing the funds and avoid defaulting at a later stage.
Increase working capital
A personal loan for business ventures infuses a fresh dose of working capital into your business. Working capital is the money you use to run your day-to-day business.
Smaller business units need a steady flow of working capital until sufficient revenue is generated over time. With your money problems taken care of, you can focus more on developing your business and make it grow.
You can also seek the advice of a CA to determine other ways to increase your firm’s working capital.
So, when you start a venture, look for advances with low interest rates and processing fees. Opt for a personal loan from a financial institution that offers loans at affordable charges and use the funds for your fledgling small enterprise.
That way, you can start with smaller installments and improve your business’ cash flow. Remember to read all the details of a loan before you apply for one.
Category: Loans
Great post! Thanks for sharing the knowledge and keep up the good work.
Glad to be of help.