As the number of schools continues to grow in India, the existing institutions must keep improving their standards to ensure that they have the facilities sought by students and their parents.
The methodologies of teaching today are significantly different from what they used to be two decades ago. In addition to well-ventilated classrooms, laboratories, library, spacious playgrounds and sports gear, the infrastructure of schools today also needs a host of audio-visual equipment and computer devices to provide quality education. At times, it is necessary to apply for school loans to finance the purchase of such school infrastructure components.
How to get loan for school
Loans for private schools can come from several sources including banks, non-banking finance companies (NBFCs) and private money lenders. From the construction of a new school building and renovation of old ones to the purchase of furniture, lab equipment and other devices, school loans are issued for a variety of purposes.
The flexible lending policies of digitally enabled NBFCs, also known as FinTech companies, have made it easier for schools to get quick loans at easy terms. Furthermore, these organisations do not need any collateral from their borrowers: this makes a high number of institutions eligible to apply for school loans.
In India, a FinTech company’s loan for educational institutions is usually available to private schools that:
- Have regular and fully functional classes from Lower Kindergarten to Class VIII/X/XII
- Collect a total fee of more than Rs 75 lakh per annum
- Have their school building on a self-owned property
- Have promoters or trust to run the school
Schools that fulfil the criteria can borrow any sum up to Rs 50 lakhs for a term ranging between one and three years.
How to apply for FinTech school loans
In addition to being collateral-free, the easy application process of FinTech loans draws a majority of borrowers to this source of funds. You may need a loan for construction of school building, to buy audio-visual devices used in teaching or to bring other improvements to your institution. You can digitally request for the funding at any time from anywhere.
The application takes less than 15 minutes to be filled and needs to be substantiated by only soft copies of documents that verify your eligibility for the loan. These typically comprise:
- Financial statements for the last two years
- Bank statement for the last 12 months
- KYC of at least two promoters
- The fee structure for students
- Remuneration structure for staff
Once the application is reviewed by the lending organisation and is approved for the loan, the requested amount is disbursed in less than a week.
Since you will fill the application and provide your details digitally, you have to ensure that the lender’s website domain begins with https: so that the information gets encrypted. Also, check the interest rate and loan processing fee to know your EMIs for repayments.
As a leading FinTech company in India, Capital Float issues loans for private schools in India at the simplest terms and disburses funds in only 2-3 business days for approved applications. We have no additional fee other than the interest rate and a loan processing charge of only up to 2%. To know more about our school loans, feel free to connect with us on 1860 419 0999.
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“It takes money to make money.” We often hear this adage in the business world, and it does hold true. Even so, maintaining adequate cash reserves to meet the fixed and variable costs can be a real challenge, especially for start-ups and small businesses.
Most of the small and medium enterprises (SMEs) initiate operations with a low level of funds while simultaneously facing competition from established players and dealing with the challenges of seasonal cycles. Consequently, they may not be able to generate the estimated sales volumes.
Even if a venture is performing as per expectations, it may need to make additional investments to hire qualified experts, adopt new technologies and maintain larger stocks of materials/inventory for sustained progress. With experience, SMEs know that a cash cushion is necessary for both survival and growth. An Unsecured Business loan for Traders best offers this advantage.
There are multiple sources of an SME loan for small enterprises, and sincere business borrowers approach a financial institution only when they are confident about and can prove their venture’s ability to pay back in time. Nevertheless, a high number of applications get rejected because these borrowers are unable to pledge financial assets as collateral against a loan.
Not everyone owns huge property. New entrepreneurs often start their operations from rented premises and may not have any significant assets to hypothecate. A secured business loan for traders can also be denied if the lending institution does not deem a particular asset to be valuable enough for the funding.
What comes as a relief for business owners is the fact that an unsecured SME/MSME loan is a prominent option for finance, and it comes at significantly more customized terms.
As the digital revolution continues to transform the lending industry, the possibilities of quick funding have only increased for small businesses, and there is an array of SME loan products available to them. A digitally operating FinTech company offers term loans that can be used to buy new premises (shop/showroom/office) or expand the business to new locations. Entrepreneurs can also apply for a working capital loan to continually fuel operations in the low phases of the business cycle.
Moreover, FinTechs offer loan to buy stocks. This facility is particularly helpful for customer-facing ventures such as retail and restaurants.
What is common to all these FinTech credit products is that they are unsecured loans – they can be taken on short notice and without pledging any asset as collateral.
How to apply for a business loan for traders ?
A majority of new-age business managers now understand the lending models of FinTech companies. Those who are still unaware of the concept can always do a quick online search to comprehend it. In brief, a FinTech lending company typically is a non-banking financial company (NBFC) that uses digital technology to make financial solutions quicker to access.
A business loan for traders is highly sought by small enterprises. Any Pvt Ltd (private limited company), LLP (limited liability partnership firm) or Sole Prop (sole proprietary company) can approach FinTech lenders for unsecured business loans.
While the exact eligibility criterion differs as per the kind of SME loan applied for, the principal requirement is the operational business history of at least one year. Pursuant to the rules of the money market, this stipulation is necessary to show that the business owners are genuine and have been running the company for some time.
To qualify for the requested amount, a business with active operations should also show its commitment towards tax compliance. It should also have a precise idea of its loan requirements. This not only helps the borrowing organisation to increase its chances of getting an approval for the credit, but it also makes it convenient to choose the right type and term of the loan.
Anyone applying for a business loan for traders should understand the cost of the loan upfront. When a FinTech is approached for such an investment, this cost includes the interest rate and a nominal processing fee that is usually less than 2% of the borrowed amount.
The application process is entirely digital, and that makes it shorter than the overwhelming procedures of visiting a traditional lender, printing multiple copies of documents and then staying in suspense for weeks to get the required amount.
Applying for a loan from a digital platform takes less than 10 minutes, and the application formats are available on the secure website of the FinTech lender. The application form usually comprises of some basic questions to evaluate the eligibility of the business for a loan. These questions include years in operation, average annual/monthly revenue, tax payments and past credit history, if any. Digital uploads of the relevant documents support the information.
There is no waiting game when a business applies for a loan from a FinTech lending company. As soon as the application is submitted, its evaluation by customised algorithms begins, and it may then be sent for a quick manual review.
FinTechs notify the borrowers of the decision on the application on the same day. If the decision results in an approval, they disburse the total approved amount in the next 2-3 working days. The amount is credited directly to the business bank account, and the SME can withdraw the necessary sums to fund the operations/stock purchases as required.
How to pay back the borrowed amount ?
Most loans are paid through equated monthly instalments (EMIs), and the same method can be used to repay a FinTech SME loan. To make this process more convenient for their borrowers, some companies give them the flexibility to vary the instalment amount when required. As soon as the business records reflect better revenues than the estimations, it can pay off the loan in full and save the trouble of managing EMIs for the complete schedule. The prepayment penalty charged by a FinTech is still less than that of banks and traditional NBFCs.
Is your business facing a cash crunch? Do you want to move to the next level of growth or invest funds to start operations at a new location? Capital Float is a friendly FinTech lender that is trusted by businesses in multiple industries. From term loans and working capital loans to funds for specific domains such as medical practice and online selling, we provide an array of credit products tailored to the needs of business owners and self-employed professionals.
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To know all about the loan that you seek and the amount that you can borrow, feel free to call us at 1860 419 0999.
Oct 24, 2018
To provide quality education, private schools in India must have cutting-edge infrastructure and well-planned facilities. This is even more important now because the generation currently in schools is growing in an environment of mobile computing devices and e-commerce. Since private institutions are entirely dependent on their own earnings to improve their campus, they may need school loans to finance such expenses.
Let us look at the top reasons that drive schools towards taking loans from banks and NBFCs:
1. To construct a new school building
Loan for construction of school building is commonly sought by institutions that are successfully providing education services but need more classrooms to accommodate the increasing number of students. Adding more sections for each grade is also a good idea when schools are focused on keeping a low student:teacher ratio.
2. To build a playground/sports court
School loans may also be required to add a playground, basketball courts, tennis courts or rooms for indoor sports. Games are an essential part of school education, and if a small unsecured loan from an institutional lender can help to build a beautiful playing field, the investment is worthwhile.
3. To develop a laboratory
Schools need to have well-equipped labs for practical experiments concerning physics, chemistry, biology and to give students hands-on experience with computer studies. Some private schools are also required to have Home Science labs as per the curriculum for their students. A quick loan for school laboratory can be procured at easy terms from a FinTech lending company. Such lenders usually provide up to Rs 50 lakhs on loan for building school laboratory.
4. To buy furniture for classrooms, staffroom
A simple reason to apply for a loan could be the purchase of new or additional furniture for students and staff. The cost of ergonomic desks and chairs may not be within the budget of the school, and financial support from a FinTech company can come in handy.
5. To purchase commercial vehicles
Schools that provide transportation services to their students and staff may need to buy new buses or vans. If adequate finance is not available for such purchases, FinTech lenders can offer simple digital modes to provide unsecured loans with flexible repayment options.
6. To build or improve a library
Well-stocked libraries are essential components of any school’s infrastructure. A school that has been running successfully for some time, but does not have a library, can borrow funds from school loan companies to build a quality library on its campus. Unsecured school loans can also be taken to buy stocks of new books that are too expensive to purchase in the available library budget.
7. To start a new facility on premises – stationery/canteen/uniform shop
Private schools try to offer all the essential facilities for the convenience of students. If there is a stationery unit on the campus, students can purchase prescribed textbooks and other essential items without having to visit markets. A shop for summer and winter uniforms makes it easy to buy the exact uniform as required by the school. While canteens are not “must-haves”, they are good to provide hygienic menu options to the students and staff. School loans may be taken to fund such facilities.
8. For repairs and renovation
A school that already has structures or facilities for education and sports may also need a loan to repair, renovate and improve them. It can digitally apply for such funds on a FinTech company’s website.
9. To purchase new teaching devices, audio-visual equipment
School loans fund the purchase of interactive teaching devices that are becoming increasingly important in the digital age. Educational institutions can borrow to install whiteboards, overhead projectors and other audio-visual teaching aids to make learning more interesting for their students.
10. To add/improve day-boarding facilities
Some private schools offer day-boarding amenities to their students. As a part of this facility, they need to provide healthy meals and areas for rest and recreation. To build and improve such environment, they may need loans that are offered most conveniently from FinTech companies.
As a leading digital NBFC offering loans to educational institutions, Capital Float funds all such requirements of schools in India. To know more about our financing products, feel free to call us on 1860 419 0999.
Oct 24, 2018
Small business owners often have to go an extra mile to ensure the consistent growth and success of their ventures. They must work hard in dealing with their customers and suppliers. They also need to come up with innovative ways to market their products and services. In their efforts to polish the customer-facing, technical and marketing aspects, small and medium enterprises (SMEs) often overlook the attention that their creditworthiness requires, which is vital to their chances of getting business loans.
If all goes well for the business and it is able to get a constant stream of customers, its position in the industry will be strengthened. This, in turn, opens doors for business finance from banks, conventional non-banking finance companies (NBFCs) and the new age NBFCs in the form of FinTech lenders. However, a few clever methods help in improving the prospects for business funding.
If you are an entrepreneur with a promising business idea that is backed by adequate possibilities for success, you must take it forward. To improve your chances of getting a loan for business expansion, here are the three points that you can pay heed to:
1- Make timely payments on your bills and clear outstanding credit
Financial discipline is the key to success when you are managing a commercially motivated organisation. In business, you may have to make regular payments to your suppliers and vendors. These ought to be made on time.
With frequent delays on the payment of your outstanding invoices, you may hurt your prospects for being qualified for business loans. A late payment on bills can damage your financial records, particularly if it gets reported to business credit scores rating agencies such as CIBIL.
If you had missed a couple of payments, but later managed to catch up with the regular cycle, the delayed payments may have had some adverse impact on your credit ratings. However, the damage is not permanent. As credit scores are a reflection of activities over a period, it can take some time for the new data to set in and replace the older information. The credit score will gradually improve to reflect your eligibility for business finance.
The focus should be on making payments on bills before they are due. This is not only a good habit that will help your business get higher credit ratings, but will also improve your relationships with the suppliers and vendors. If you have severe financial constraints, you can use strategies such as invoice financing. (Link to relevant product page can be placed here)
In addition to the bills raised by entities dealing with your company, payments on credit cards and existing loans should also be made on time. Most importantly, keep all the receipts against payment safely in your records.
2- Use credit prudently
The FinTech revolution has given access to fast business loans and has made it convenient for SMEs to expand their presence in the market. If you can demonstrate the ability to use your loan for business wisely, it will only improve your business credit rating and will help you borrow bigger amounts in future.
Funds must be used for the purpose that was stated to procure them. If you have taken a loan for business activities – such as paying a vendor, buying raw material or inventory, refurbishing a storefront – it must be used accordingly. Do not use business finance for personal expenses. The mixing of personal funds with those for business can happen unknowingly at times, especially for start-ups and sole proprietorships, but the two should be separated as soon as possible. This helps in improving the credit history records considerably.
Another point to understand here is – if your business has credit accounts in good standing, but you barely use them, do not be tempted to close such accounts. They may come to the rescue of your business plans in future. What is more, the closure of any account trims down the total amount of credit that may be available for your company, and conversely, increases the ratio of credit utilisation stats – this change of numbers will negatively impact the credit score.
When the debt load is haphazardly scattered in multiple accounts, you should work on reordering it so that there are smaller balances on different accounts. Once you are able to make regular payments on them, it will gain you credit for paying off more than one outstanding balance.
3- Avoid taking hasty or risky decisions
When you are managing a business and dealing with people from different fields every day, you will have your own experiences and learn to do things differently. Keep a vigil on the financial situation of your organisation even if you have hired accountants to manage your finances. Decide upon the figures that you aim to achieve and know what it will imply for the health, bottom line and future prospects of your business. This helps to maintain focus and financial discipline.
Avoid the risks that can affect your business credit scores. Some activities such as dealing with other companies of dubious nature not only harm your brand image, but also deter your business finance providers. Keep away from inherently risky operations that can cause financial stress in future.
Lastly, if you spot any mistake in your credit history records, do not hesitate to get it amended or inform your prospective lender. If you had paid off a bill in time but it was shown to be outstanding by the concerned entity, divulge the receipts to make corrections and prove your point. As a FinTech company offering quick loans to small and medium enterprises, Capital Float is on a mission to promote the spirit of entrepreneurship in India. Our process of evaluating the creditworthiness of a business is concise, lucid and clear-cut. It enables a high number of businesses to get timely funds. Capital Float also guides start-ups and growing companies in improving their prospects for bigger loans in future. Visit our website to find the best product that suits your business need.
Oct 24, 2018