Are you a dynamic entrepreneur whose ultimate goal is to turn your passion into reality? Are you looking at starting or expanding your small and medium-sized enterprise (SME)? Do you believe that all you need is a push to fulfil your dreams? In that case, you can look at any of the several sources of business loans – banks, non-banking finance companies (NBFCs), government institutions, venture capitalists – that are here to work with you as a partner to help actualise your business ideas.
In the current economic climate of India, SMEs are in constant need of funds to expand their businesses, meet working capital needs, or make optimal use of business opportunities. Business loans, either from traditional sources or from FinTech companies such as Capital Float, can provide an optimal solution to meet such financial requirements.
Such loans, besides their obvious benefit of the right funds at the right time, carry several advantages that make their choice a good one. Here is a look at the benefits of availing a business loan for expansion:
1- Helps with the cash flow
Business loans can be either utilized to boost revenues or to gain competitive edge. So a company may look to open a new branch, launch a marketing campaign, add to inventory for seasonal demand spikes, and so on. Any money can be good money, provided it is used efficiently and wisely. You can opt for short- or long-term financing, small loan or large, whichever works well for you. The idea is that the income generated from such avenues goes towards repayment of the loans, and leaves a tidy sum for you to use otherwise. You get to achieve your business goal without having to spend your cash.
Banks are generally the first choice when it comes to applying for loans. Their primary advantage lies in their accessibility and familiarity, especially for long-term customers. Although it is tough to get a loan approved, you carry home the satisfaction of getting away with lower interest rates. Also, unlike venture capitalists and angel investors, you need not part with either ownership or profits from businesses.
2- Simple and speedy loan disbursal process
New age FinTech companies in comparison are catering to a huge demand for business loans by focusing on start-ups and SMEs. With government support and positive economic outlook working in favour of such ventures, there is massive scope for funding new businesses or expansions. Digital lending platforms tap this market by providing business loans, which work well for the borrower as well as the lender. The loan processes are simple, friendly and hassle-free. Capital Float is one such company that offers small business loans in a simple 4-step electronic process, ensuring enhanced customer experience.
All you need to do is fill up the online application form by visiting www.capitalfloat.com from anywhere, anytime, and upload the required documents. The minimal, hassle-free, and user-friendly documentation process is followed up with on-time finance disbursal to borrowers. Specialised companies like Capital Float ensure that your loan is disbursed within 72 hours.
3- Customised solutions for SME needs
Business loans can give the ultimate boost to your company in an efficient and effective way. Banks as well as Fintech lenders like Capital Float believe in the uniqueness of every business, and provide a wide range of flexible, tailor-made loan products that cater to the specific business needs of SMEs in India. You can choose the most suitable option that meets your requirements.
The repayment options are equally flexible. Based on your financial needs, most lending companies provide you business loans ranging from Rs 1 lakh to Rs 1 crore for varied tenures. For example, you can avail business loans for a tenure of 1-12 months with no pre-closure penalties and extremely flexible repayment options (ranging from 12 months to 36 months) from Capital Float. These features are designed to specifically cater to the needs of SMEs in India. SMEs taking loans against receivables can repay it in a single “bullet” instalment at maturity, while those taking unsecured loans can repay through EMIs.
4- Competitive interest rates
Not only banks, certain NBFCs and other lending companies can also offer business loans at competitive interest rates. Capital Float for instance provides business loans to small and medium businesses in India at very competitive interest rates, nominal processing fees, with absolutely no hidden charges. These features make FinTech companies like Capital Float some of the most preferred lenders in the present small business loan market.
5- Collateral free finance
Business loans provide financial support to a very wide range of SMEs, such as B2B service providers, manufacturers, traders, or distributors. Companies like Capital Float work as a partner to provide seamless support to SMEs in fulfilling their dreams. You can avail collateral-free finance, which doesn’t require you to pledge any property or asset to get a business loan. Your business is evaluated based on the strength of your cash flows and expected receivables. Any SME with a minimum of one year of business operations can avail of such business loans.
Very few lenders really believe in embracing new ideas with open arms. New-age lenders however are more willing to invest in new ideas. Capital Float, for instance, provides small business loans to new-age businesses in India along with financing the needs of traditional businesses.
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As the past couple of years witnessed a drop in data costs, WhatsApp has successfully replaced the traditional offline messaging service as the primary mode of text communication in India. Leveraging this fact, this messaging platform launched WhatsApp Business – the pilot for a dedicated mobile app exclusively for businesses – in early September 2017.
Since its launch, popular brands in India such as BookMyShow and MakeMyTrip have been using this Facebook-owned WhatsApp business strategy to connect with their target audience. Though there are many apps that cater to business users, a messaging platform like WhatsApp provides a wider scope for a larger number of businesses, be it the local grocery store, professional services, medical institutions and even the government.
- FREE OF COST
You read right! WhatsApp Business lets you list your business and contact your customers at absolutely no cost. With a popular messaging app enabling business owners to send service messages for free, this could mean a gradual decrease for the conventional, but costly SMS facility. This WhatsApp business plan also counters the need for SMEs to create a mobile presence by designing smartphone apps, a distinct advantage for young enterprises from a cost and complexity perspective.
- DESCRIPTIVE BUSINESS PROFILES
If you own a small business without a website, WhatsApp Business allows you to describe your business in detail, and you can fill in addresses, contact numbers, social media links, etc. that lets your clients know more about the nature of your operations. The app takes verification seriously; a green tick appears against the name of your business when WhatsApp Business has corroborated the details you had provided.
- MULTIPLE MESSAGING OPTIONS
This unique feature of customized reply settings on WhatsApp Business ensures that you are customer-ready at all times. The ‘Quick reply’ option lets you set up standard responses to frequently asked questions. To all new leads who get in touch with you, the ‘Greeting message’ can introduce your business and what makes you different. You can also frame a custom ‘Away message’ for communications during off hours or when the small business owners are busy.
- BUSINESS ANALYTICS
More communication also means more data, which can be leveraged to understand your customers better. WhatsApp Business offers messaging statistics, a feature that provides metrics on the number of messages that were sent, delivered and read. Using this information, you can analyze the frequency of response from your leads or customers, modify the content of quick replies and experiment on the strategy of communicating with them.
- WHATSAPP WEB SERVICES
WhatsApp Business supports its projection via WhatsApp Web, which lets you manage the service through your computer without the mobile app. It provides additional efficiency when interacting with clients and partners, and leaves automation possibilities open as the system grows.
Setting up WhatsApp Business
WhatsApp Business in India is present only on the Play Store; so you will need an Android smartphone to use the app. As every WhatsApp account can be linked to unique mobile numbers, you register on this WhatsApp for business by using your official business number or your office landline.
Keep these ready before you set up the WhatsApp Business app, the steps for which are given below:
1. Backup your chat data to cloud storage if you already have a number which is primarily used for business with WhatsApp. Click on Chats>>Chat Backup>>Backup to upload to the cloud.
2. Download the app from the Google Play Store, install it and then launch it by tapping on the new WhatsApp Business icon.
3. Enter your business phone number that will be used to communicate to your customers, and verify it using the SMS (for mobile phones) or ‘call me’ option (for landlines).
4. Restore the previous chat related to the number once verification is complete (from Step 1).
5. Fill the name of your business and from the chat section, tap on the menu button and head to Settings>> Business settings>> Profile. Here, you can fill in all the details that you want to share with your customers.
What’s in it for small businesses?
WhatsApp Business is extended only to small businesses, an exclusivity that budding entrepreneurs can use to their advantage. The WhatsApp for business marketing aims at streamlining and extending the reach of small businesses without making hefty investments in website development, mobile app creation, customer support, and more.
Moreover, it helps notch up the idea of personalized marketing, as you can use the app to share images of products and promotions periodically to your loyal band of customers. The WhatsApp Business app also offers credibility to small businesses – a green tick against the name of your enterprise verifies the genuineness of your services and operations, an aspect that will help a majority of SMEs to reach out to a wider audience.
There are nearly 230 million WhatsApp users in India, and the fact that everyone knows how to use this WhatsApp for business use eliminates the time required to learn the nuances of a mobile application for businesses. Thus, WhatsApp Business is a ground-breaking solution to the communication and marketing needs of small businesses. We expect the introduction of WhatsApp Payments to act as a catalyst for this business with WhatsApp option to implement artificial intelligence, data analytics and voice recognition technology to optimize it into a powerful sales and marketing channel for small businesses.
Oct 24, 2018
The growth of the SME (small and medium enterprises) segment, which contributed nearly 40% of India’s exports, has been restricted by the lack of access to timely finance. Only 4% of 57.7 million small business units in the country have access to formalized finance, leaving many to rely on informal lenders, who charge exorbitant interest rates. Requirements like collateral and detailed documentation as well as the long processing and disbursement time of loans deter SMEs from approaching traditional financial institutions. Thus continues the huge gap between the need for funds by SMEs and the amount of funds actually approved as loans.
This severe shortfall needed to be addressed, especially given the importance of SMEs to India’s economy. This is where FinTech companies like Capital Float have risen to the occasion, offering new business loans that are aligned to address specific needs of the SME sector. While cutting-edge technology is being deployed to make innovative financial products available to smaller businesses, SMEs must be aware of the available finance options to take make an informed decision.
SMEs make some common mistakes when applying for secured and unsecured loans. As a result of these mistakes, their loan applications may get rejected. Here are some tips for small businesses to avoid rejection of their business loan applications.
Banks and other lending institutions would require certain documents to verify the claims made by a business. The decision to sanction a loan is taken by the lender after evaluating the prospects of a business, its ability to repay the loan amount and its previous credit record. This is done by checking various documents certifying the presence and existence of a business, its financial statements, taxes paid by it and other documents that indicate the financial standing of the business and the business owner(s). To ensure speedy approval of its loan application, a business must organize its documents and submit these in an orderly manner to the lending firm.
Any kind of delay in submitting the desired documents may be viewed negatively by the lender and could even derail the whole process. So, every business seeking a short term loan needs to be organized about its documentation. All the papers should be ready for submission when applying online for a loan. Your swiftness in providing the necessary information along with requisite documents can speed up the approval process.
Be Mindful of Your Credit Profile
The credit profile of the business owner or owners plays a key role in the ability of the SME to secure a business loan. Ensuring a good credit profile is not difficult. This is possible by ensuring that all your credit card and bill payments are made on time. The timely repayment of all due amounts including the ones relating to any existing loans helps improve the credit score.
Often business owners ignore their credit score thinking that it would not impact their ability to secure a loan for their business. They fail to understand the significant negative impact this can have on their business. It is important for business owners to regularly check their credit scores and take the necessary steps to improve them. Such efforts can ease the process of securing finance for the business in the future. In some cases, the credit scores do not even reflect the true situation. Regular monitoring can help business owners rectify the errors in the scores and boost their chances of getting loans on time.
Have A Firm Business Plan
Seeking loans without any kind of business plan may result in the loan application being rejected. A business plan is a reflection of the goals, the purpose of a business and ways to achieve them. It shows how a business intends to operate and how much funds are needed and at what time. A clear business plan not only helps a small business to ease the process of loan application, but also to determine the specific amount of funds required. This in turn enables the business to apply for a business loan well in advance besides providing the lender clarity into the purpose for which the loan is sought.
Thus, a well laid out business plan helps a business provide answers to questions like:
- How much loan is required and for what purpose?
- How quickly are the funds required and for what duration?
- What is the current financial standing of the business and when will the business be able to repay the borrowed amount?
- Does the business need secured or unsecured loans?
With FinTech lenders like Capital Float offering an array of innovative products, small businesses also need clarity to enable them to choose the loan that is most appropriate for them. A business plan would also help with this. In the absence of a business plan, the screening process may take longer and the chances of rejection of the loan application are also higher.
A business seeking a loan should not borrow from the first lender it comes across. Instead, it’s advisable to do thorough research and compare the loan terms offered.
Capital Float helps small businesses seeking loans to identify the right type of loan for their working capital needs, besides offering multiple repayment options. The use of advanced algorithms helps to underwrite businesses uniquely, check the repayment ability in absence of credit scores and develop customized lending solutions to suit the individual requirements of potential borrowers.
Oct 24, 2018
SMEs are sometimes cash-crunched to provide credit to their customers. These customers often ask for 30-60-90 day credit after raising an invoice. Due to the absence of negotiating power, SMEs are often arm-twisted into accepting delays in payment. The gap in cash flows resulting from delayed receipts affects the performance of a company and its ability to run smoothly.
Such situations can now be easily avoided by using Supply Chain Finance, which allows a business to raise the necessary funds by using its receivables. Read on to know more about how supply chain financing can be a powerful tool for boosting the cash flows of your business.
When is Supply Chain Invoicing Needed?
Businesses offer a credit period to customers after executing an order and raising an invoice, since this helps them establish a stronger relationship with customers, build customer loyalty and receive recurring orders. While on one hand, SMEs need to deal with delayed payments from clients, they do not have the negotiating power to delay payments to their suppliers. Moreover, they need funds to make overhead payments and provide salaries to their employees. Even the most profitable SMEs may face cash crunches due to the time lag between having to incur expenses and actually receiving payments from clients.
If not fulfilled in time, this shortage of funds can weaken the smooth functioning of the business. This is where supply chain invoicing for small businesses comes to the rescue. The invoices are like an asset for a business, and can be used to overcome cash flow issues. Supply chain invoicing uses the accounts receivables of a business as a means to increase liquidity.
Invoice Factoring Versus Supply Chain Invoicing
There are two ways in which a business can use its invoices to infuse cash into its operations: invoice factoring and supply chain invoicing. With invoice factoring, a business sells its outstanding invoices, often at a significant discount, to a third party. Supply chain invoicing allows a business to use its outstanding invoices as collateral to secure a loan. Often businesses do not prefer invoice factoring since they do not like the idea of a third party contacting their clients to recover an invoice. This can have a bad impact on the relationship between an SME and its customers.
Supply Chain Invoicing for Small Business
If a small business has outstanding invoices, it can use these to inject cash into its operations. Capital Float’s Supply Chain Finance product does exactly that. The best news is that the benefits do not end there.
Fast Loans: For any business, especially an SME, timing of receiving funds is critical. Using cutting-edge technology, FinTech companies like Capital Float are able to meet the most urgent working capital needs of small businesses. In fact, the Supply Chain Finance product uses data-driven criteria to approve a loan within hours and disburse the sanctioned funds within just three days.
Convenient Application: One does not need to visit a financial institution and stand in any queues to apply for supply chain invoicing from a FinTech lender. One can apply online, at any time and from anywhere. With such options available, an SME can say goodbye to the hassles of obtaining a loan from a traditional bank. The application process for Supply Chain Finance is so smooth and easy that one can complete the application form even while traveling from home to the workplace. What’s more, Capital Float has a mobile app that makes the application process even easier. The complete process involves filling up a form and uploading the required documents, which takes less than ten minutes.
High Loan Amounts: An SME can receive as much as ₹1 crore to inject into its business. From as low as ₹1 lakh to as high as ₹1 crore can be secured to be used as working capital or to fund the growth of a business. An SME can borrow as much as 90% of the value of the outstanding invoices. One can use the supply chain finance calculator to get an idea of the amount the business can borrow.
Flexible Loan Tenure: With Supply Chain Finance, one can have a repayment plan between 30 – 180 days. The greatest feature is the one time bullet repayment option, which allows a business to repay the loan in one go, thus reducing the interest burden. Else, the business can repay the loan in easy monthly instalments.
Minimum Documentation: In order to Apply for Supply Chain Finance, a business would need digital copies of only a few documents. These include audited financials for the past couple of years, VAT returns and bank documents for the past six months, KYC documents of the business owner and the SME, invoices for the last three months and sales ledger for the last six months.
Do you raise invoices and then need to wait weeks or months for clients to pay? Did you know your cash requirements could be met with supply chain financing?
Now a business can secure the required financing without pledging any assets. The invoices are all that a business needs to infuse cash immediately into its operations. Revolutionary products like Capital Float’s Supply Chain Finance have helped solve the cash flow problems of many businesses. Moreover, being technology driven, there is complete transparency in the fees for this service. There are no hidden costs in acquiring this loan product.
Oct 24, 2018