Loan for business is like fuel for the business. To run a business, there is a requirement for a continuous flow of funds and a loan for business helps in meeting this requirement. The requirements can be for various reasons, from capital requirements and for the payment of utility bills to buy machinery and capital investment.
Nonetheless, there are times when a business is not able to generate enough funds to meet its requirements. In fact, sometimes it is not able to generate funds to meet its everyday requirements. And in such times, a loan for business turns to be an ideal option. So, if you are an MSME owner, a small amount of capital can do wonders for your business.
Now comes the most important thing – when to apply for a business loan in India? If you apply for a loan for business early, it would cost you unnecessary interest charges. Also, the amount may be mis-utilised. And if you apply for business loan late, you may miss the expansion opportunity. And it can also lead to business suffer financial problems.
Let’s see when you should apply for a loan for business:
Table of Contents
During Off-Season
Also Read: How To Get A Business Loan?
If your business has an off and on the season, off-season is the right time to avail a loan for business without security. You may have poor sales and therefore, less income. But the requirement for funds for some activities remains the same. Such as utility bills, salaries, storehouse operations, etc. By availing a small business loan, you will not have to cut on your prices or offer a discount that would have an effect on the revenue.
During Peak Season
Also Read: MSME Loan in 59 Minutes: How To Avail It?
With the off-season, peak seasons are also the right time to avail a business loan. During the peak season, the demand for goods and services increases. And you might need to hire more staff or need more storage space. You can ask the supplier to supply you goods on credit but not all suppliers agree on that. In addition, even if they agree to provide you with inventory on credit, they would require some down payment.
Managing inventory during peak season is crucial. So, a loan is required! With the more inventory, you can meet customer demands.
Machinery Purchase
Also Read: Answered: Most Burning Questions About A Machinery Loan Without Security
No one can deny the importance of the role of machinery and equipment in the production. And without production, there are no sales. Also, a new and upgraded machinery reduces the cost of production per piece and also improves the quality of the product. So, a machinery loan or an equipment loan can be availed to upgrade machinery or buy a new and improved version.
However, not always it is possible to take out a huge chunk of the amount from the profits as it can affect the current cash flow significantly. So, if you require a new machinery but lack in capital for investment, you can look forward to avail a machinery loan. A new machinery will ensure that you do not compromise on the quality of the products and services you are selling. And this will lead to generating goodwill of your goods in the market.
Business Expansion
Also Read: 7 Business Loan Considerations That You Must Know
When you think you want to expand your business, there is a cost involved – capital investment. So, with the business expansion on the cards, there is a need for funds that can help you make an investment in the new branch, hire staff, and buy machinery or inventory. In all, if you know you will expand your business in the months to come, apply for a loan for a business in advance.
Unexpected Business Opportunities
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There are times when you witness an unexpected business opportunity. Do you have any cash spare to encash the opportunity for your business? If not, then the business loan is your savior. However, the business loan requirements of the bank are very stringent and they take a long time to approve loans.
So, your best option here is to avail an NBFC business loan. The NBFCs have a basic business loan eligibility and the documents required for business loan are minimal. You can apply for a loan and submit the required documents online.
Apply for Working Capital Loan
Now that you know when to apply for a small business loan, you take the advantage and take your business to new heights. ZipLoan is an RBI registered NBFC that offers SME and MSME loans at basic eligibility criteria and minimal documents. You can apply for a loan online and if your application is approved, we disburse loan within a few days.
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