Agriculture, as we all know, is the backbone of our country. Well, after a few more years, this term may be replaced with entrepreneurs. The country’s workforce has made so much progress in driving the economy forward.
Entrepreneurs need a good flow of money to run their business operations and achieve their goals. Although funding from angel investors plays a vital role in the entrepreneurial ecosystem, business loans are equally important to meet the business financial needs of entrepreneurs.
In a business scenario like India, where the rise of entrepreneurs is one of the fastest in the world, hassle-free business loans can be useful for entrepreneurs who do not have assets or valuables as collateral.
growing market
To put things in perspective, India has emerged as the third largest ecosystem for startups in the world, with over 99,000 Department for Promotion of Industry and Internal Trade (DPIIT) recognized startups operating across 670 districts in the country as of May 31. are doing. 2023.
There are a total of 109 unicorns among them with a market cap of $1 billion. The government has recognized startups solving problems in 56 diverse industrial sectors, of which 13 percent are from IT services, nine percent from healthcare and life sciences, seven percent from education, five percent from agriculture and five percent from food. And beverages.
Given such a huge pool of entrepreneurs and a wide variety of sectors, it is essential that they grow their businesses to advance the economy of the country.
So, what is hassle-free loan? This is when a businessman does not need collateral. In other words, the person is not required to pledge any property or valuable item as security against the loan.
Partial repayment, interest only on the money used and not on the entire borrowed amount, quick approval and instant disbursement are some of the distinguishing features of hassle-free loans.
Factors to Consider
While eligibility is an important aspect while applying for any loan, you also need to be ready with all the documents required for the application. Here are some factors you need to keep in mind before applying for a business loan:
1. Low CIBIL Score: CIBIL score of 700 or more can easily get you a loan.
2. Business Registration: A lender will consider this as validation of your business. If your business is not registered then the chances of the loan application being rejected are high.
3. Documentation: KYC documents like Aadhaar card, PAN card, and other details like establishment details, income proof and bank details are the most common loan documents.
4. Future Plans for Business: A lender wants to know how you will make money through your business establishment. They do not want their money to get stuck.
5. Loan Terms and Conditions: As a borrower, you need to calculate how you will repay your loan. For this, you need to look at what different lenders are offering. You need to do a thorough search of factors like interest rate, loan tenure, EMI, loan insurance and late penalty.
Moreover, having a paperless mechanism to deal with the lengthy documentation work goes a long way in making the process hassle-free. Consider this: You’re trying to expand your business and looking for adequate funding when you come across the idea of a business loan. Now, would you like to add more paperwork to your burden? Or would you like to consult a financial institution that gives you easy access to loans? Food for thought, right?
Types of Hassle Free Business Loans
There are many options for hassle-free loans available in the market and you can choose the most suitable option depending on the type of your business, the purpose of the loan, terms and conditions, your repayment capacity, etc.
Some of the major hassle-free business loan types are:
Working Capital Loan, Overdraft Facility, Term Loan (Short and Long), Letter of Credit, Bill/Invoice Discount, Loan under Government Schemes, POS Loan or Merchant Cash Advance, and Equipment Finance or Machinery Loan.
Additionally, some government loan facilities are specifically focused on startups and entrepreneurs. Some of them are Pradhan Mantri Mudra Yojana, Credit Guarantee Scheme, Stand Up India Scheme, Bank Credit Facility, Coir Udyami Yojana and Market Development Assistance, etc.