Capital is one of the essential things to run a business, and when a business owner runs out of capital, he avails flexi loans. A cash crunch can happen because of various reasons, ranging from clients not paying on time to urgently buying inventory. So, for situations like this, he can apply for flexi loans.
A flexi business loan is a new-age loan where the applicant gets a credit limit which he can use in the times of need. Through this type of loan, a business owner can fulfil all his business needs at the time of capital crunches, business expansion, equipment purchase, and much more.
The business owner can borrow as many funds as required from the credit limit and as many times he needs. The interest is charged only on the money withdrawn and not for the full limit. Also, part-payment of the loan is allowed according to the borrower’s convenience. And no penalty is charged for this.
Benefits of a Flexi Loan
The following are the benefits of flexi loans for a businessman:
- He is not required to apply for a loan every time but only once.
- He gets an option to pay interest as an EMI.
- No extra charge is levied on the part-prepayment of the amount borrowed.
- The businessman can withdraw funds as, and many times he requires.
- The money can be withdrawn online.
Understanding Flexi Loans
Loan Amount: flexi business loans come with a flexible credit line. The credit line is directly proportional to the credit score, i.e., the higher the credit score, the higher the credit limit. The business owner can withdraw funds from the account as and when required. And that too as many times as he wants.
Interest Rate: the interest is not charged on the entire credit limit. The loan lender charges the interest only on the amount which is withdrawn from the account. Thus, the business owner has easy access to the funds but is only charged for the amount he uses.
Repayment: the flexi loans come with flexible repayment tenure. For this, the borrower can repay the loan amount under a flexible repayment tenure. Usually, the tenure options of 12 months, 18 months, and 24 months are offered. He can choose one according to his repayment capacity.
Loan Disbursement: generally, the loan disbursement takes less than a week with NBFCs. However, if the same is applied to banks, it takes more than a week. Additionally, a lot of paperwork is also involved. If a flexi business loan is applied with an NBFC, they offer online loan application process. The businessman can fill the application online and also upload the soft copies of the documents online. The application is processed and disbursed within a week.