Cash flow helps in determining the health of a manufacturing business. And a business loan for manufacturers can be availed if there are not enough funds to meet the daily financial requirements of the business. It is common for an SME manufacturing business in India to have more expenses than the income. At times, the prices of the products and service are set low to attract more buyers. Also, the purchase of quality raw material can also increase the expense of a manufacturing business.
Holding the operations for a temporary period to improve cash flow is certainly not the right decision. This can lead to the manufacturing business to suffer revenue loss as well as loose competition to the competitors. Additionally, there certain recurring expenses as well that are required for the manufacturer to pay to keep the production and business running. These include office rent, utility bills, insurance premiums, etc.
A manufacturing business that plans to grow his business can fuel its operations in time of low cash flow through a loan for manufacturers. There are many manufacturer loan lenders in India that offer unsecured SME loans at minimal documentation and most competitive interest rates. You can also look forward to avail the same to help your business grow and expand.
How to apply for Business Loan for Manufacturers?
FinTech companies or NBFCs these days are becoming an ideal option to avail a business loan for manufacturers online. These companies use digital techniques to receive loan application and also disburse loans in the most minimum time possible. The advent of these organizations in the financial market has made availing a loan for a manufacturer a hassle-free task.
Also, the manufacturing businesses that cannot afford to avail a bank loan for manufacturers due to lack of security to offer are availing NBFC business loans. The NBFCs offer unsecured business loan for tile manufacturer at easy to meet eligibility criteria. Also, their online loan application saves much time and effort of the manufacturer that he can otherwise invest in his business.
The application for a business loan for manufacturers in India can be filled in less than 10 minutes through a secured internet connection. The business loan documents can also be uploaded online on the lender’s website. Also, they require a minimal list of documents, including PAN, identity proof, address proof, business entity proof, and income statement.
Within a few minutes, you can apply for a business loan for garment manufacturers or any other type of manufacturing business. The NBFCs approve/disapprove loans within a few hours if all the information and documents provided is correct. And they disburse loans within 3 days of application.
Type of Manufacturer Loans
There are various types of manufacturing business loans available in the market. The first two categories are secured and unsecured business loans. The secured loans require security against the loan availed while there is no such need for the unsecured loans. The other types of business loan for shoe manufacturers and other manufacturers include:
- Machinery loan
- Capital loan
- Working capital loan
- Term loan
- Flexi loan
All these types of business loan for manufacturers are designed to serve a different purpose. And per the need of the manufacturer, he can avail the loan that best fits his business needs.
Understanding Loan Fee
While searching for different loan options for manufacturers online, the borrowers would surely compare them on the basis of the interest rate. Lured by low interest rate, they at times avail a low interest business loan which later turns out to be more expensive. The major reason for this is lack of knowledge. The interest rate is not the only cost of the business loan, there are several other costs as well.
Some loan lenders do not mention the entire cost of availing a loan on their website or brochure. They talk about terms and conditions in tiny letters that are often missed or overlooked. The manufacturers in India must acquire all the details of the processing fee, file charges, loan insurance cost (if any), documentation fee, etc. These all costs together make APR of the business loan.
Ease of Repayment
A business loan for manufacturers is often repaid in EMIs (equated monthly installments). The FinTech and NBFCs offer flexible repayment tenure to the borrowers for the ease of repayment of manufacturer loans. That said, some manufacturers also wish to repay their loans before its tenure. As opposed to the repayment charges levied by banks, most NBFCs do not have any such charges.
Conclusively, availing the type of loan for the manufacturer and its source depends on the borrower. However, unsecured business loans from NBFC put the manufacturers in a more favorable position.