A loan for traders can be very helpful to grow trading business. The additional funds availed in terms of a loan for traders can be used to buy raw material, invest in marketing, and grow business. There are many loan lenders operating in India that offer a loan for traders to small and medium-sized businesses. That said, there are different loan products designed for different purposes.
And in order to be able to avail the best type of business loan, you must know the different types of loan for traders available in Sonipat. Read on to know the type of loan for traders without security and with security available in the market to make an informed choice.
Table of Contents
Machinery Loan
also read: what are the situations where availing machinery loan is important?
Machinery is the most important factor for every business owner. The better the machinery is, the better the business can produce. So, the machinery and equipment should be updated and well performing. Better-performing machinery not only produces goods at a low cost per unit but also reduces the cost of defected products. So, a machinery loan is certainly the best loan for traders if they want to buy new machinery or equipment.
Capital Loan
also read: how to get unsecured business loan for traders?
As the name suggests, a capital loan for small traders is availed for capital investment. The trader may want to grow his business or want to open at a new location. Additionally, he may also want to invest more in his business – start a new product line. However, if he does not have enough funds for the same, a capital loan is the best option. A small business loan of up to Rs. 5 lakhs can be availed for this purpose. You can invest more capital in your business and take it to new heights.
Working Capital Loan
also read: what are the types of working capital loan?
Working capital is required to meet daily/monthly or recurring expenses, such as rent, salary, etc. However, it is not always possible for a businessman to have ready cash 24×7. Sometimes, they deal in credit which leads them to a position where they need additional funds in terms of a loan for business. So, a working capital loan is the best loan product for traders who often deal with credit.
When you deal in credit, often times you do not have enough liquid cash to pay for everyday expenses. This situation, when there is not enough liquid cash, is created when you have high bills receivables pending. A loan can help in this situation by getting access to cash instantly to pay creditors.
Term Loan
also read: how can short term loans help you improve cibil score?
A term loan is a type of loan product that has a specific or fixed repayment tenure and floating or fixed interest rate. This loan product is the best option for small businesses who are well-established and have sound financial statements including bank statement. This ensures that they would be able to pay EMIs on time.
A term loan can be a short-term loan or a long-term loan. Short-term loans generally go up to 24 months while long-term loans can go up to 25 years. However, for a businessman, a short-term loan is the ideal option as it can be repaid it in a shorter time frame.
Flexi Loan
A flexi loan is the best loan type if the traders often require urgent funds. This is a credit facility where once the lender sanctions the application, you get a loan limit sanctioned. You can withdraw funds as and many times you need during the tenure. Suppose you have got the limit sanctioned in January but need funds in April, you can withdraw money from the account without applying for the loan again.
The limit is sanctioned for a time period during which funds can be withdrawn as many times as you want. Notably, the lender will charge some fee for this but the interest will only be levied on the amount that is withdrawn and not on the entire amount sanctioned.
Now that you know the types of loans available, you can make the best choice that will benefit your business. Additionally, you can also register your business for free at the Connect App by ZipLoan to build your business network. Through the e-marketplace, you can create a business profile, list your products/services, find business, discover new business opportunities, and build connections.
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