Improving the Profitability of Private Schools

Intimidated by the long-drawn process of getting a loan approved from conventional sources such as banks and traditional NBFCs, schools in India often discard the idea of borrowing funds for improvements on their campus. They try to make the most of their limited available funds, even if it means some degree of compromise on the quality of upgrades they had planned for the school.

Such an approach does not bring any benefits in the long term. In some cases, it may even backfire. For instance, if a school purchases low-quality furniture due to inadequate funds, which causes discomfort to students/staff using it for 6-7 hours every day, it may not only tarnish the school’s reputation but also cause serious health problems for the users.

What comes as a relief is that school loans are available on easy terms from FinTech companies that are essentially NBFCs but have a streamlined digital lending model for quick disbursal of funds. From a loan for buying school furniture to any other loan for school development, they can provide funds within a week of application receipt. The application needs to be substantiated by only the soft copies of a few documents verifying the credibility of the school.

So what are the benefits of leveraging a quick school loan from such a source? Does it lead to more profitability for the educational institution?

Here’s how the benefits of these loans unfold:

Enable improvements in infrastructure and purchase of new teaching equipment

FinTechs can provide a loan for school construction which helps the borrowing institution to divide students of the same class into different sections. With this, teachers can give more attention to each student, and the quality of teaching improves. The building structure can also be expanded when a school decides to admit more students or has to advance its existing classes to higher grades.

Schools can also take a loan for smart class facilities that are sought in every private school today and have become significant for a generation growing in the digital age. Other areas where a school loan can be used include furbishing of labs and computer rooms, purchase of games supplies and investment in vehicles for transportation services.

Invigorate interest in admissions

The most direct impact of bringing improvements in school facilities is a rise in the number of students who want to be a part of the institution. While senior students can understand the benefits of moving to an optimally planned school on their own, the parents of younger children who join an academy from kindergarten will also try to place their children in such a school. Provision of excellent facilities and keeping pace with new techniques that transform the learning environment is a natural incentive for more admissions in a school.

The good repute of a school can instantly attract students who move to the city due to their parents’ job transfers and have to find an educational institution in minimum time to avoid loss of studies in an ongoing academic session.

Collection of more fees

More admissions imply higher fee collection, and constant increase in this amount eventually leads to increased profitability for schools. A school loan taken to add new facilities and create better learning experiences has multiple benefits for schools that aim to be the leaders in delivering quality education services. Evidently, the increase in their earnings also helps them to repay the borrowed fund.

Whether you need a small loan for school furniture or up to Rs. 50 lakh to finance any development process in your school, Capital Float ensures that you get it most conveniently. Visit https://www.capitalfloat.com/school-finance to apply for your fund today.

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Impact of the Union Budget 2018 on Individuals

The Finance Minister, Arun Jaitley, announced the Union Budget 2018 on 1st February 2018 with components possessing the potential to have a transformational influence on various sectors of the economy. The current Indian economy has reached US$ 2.5 Trillion and is on its way to becoming the 5th largest in the world. GDP is projected at 7.4 % while the number of taxpayers has increased from 6.47 crores to 8.27 crores and a direct tax revenue growth rate of 18.7% has been achieved as of January 15th. The Union Budget is poised to leverage this upward trajectory and provide the impetus for further development at a macro and micro level. Many of the provisions in the Budget directly impact the daily life of a common man. This blog intends to dwell upon these provisions.

Health, Housing and Employment Receives a Major Boost

NHPS (National Health Protection Scheme) dubbed as the world’s largest government-funded healthcare program will be extended to provide up to ₹5 lakh towards hospitalisation for 10 crore families and ultimately 50 crore actual beneficiaries from underprivileged backgrounds.

Affordable Housing Fund (AHF) has been announced to ensure housing for all by 2022. Under this program, 51 lakh houses in 2017-18 and 2018-19 each will be constructed in rural areas with 37 lakh houses in urban areas.

₹40,000 crores worth of concessions were announced for senior citizens. The annual exemption limit on interest income from fixed and recurring deposit schemes including small savings instruments has been increased from ₹10,000 to ₹50,000 in addition to increasing the ceiling for Section 80D from ₹30,000 to ₹50,000.

To facilitate employment generation, Government will contribute 12% of wages to EPF for 3 years. The Finance Ministry has also reduced EPF deduction to 8% for women employees thus significantly increasing their take-home salary while maintaining employer contribution at 12%.

A Huge Fillip to Travel and Transportation – Growth and Modernisation

Travel and transportation received a huge fillip across roads, railways and civil aviation. ₹1,48,528 crores have been reserved for boosting railway network capacity and gauge conversion. Over 4000 km will be electrified in addition to redeveloping over 600 major railway stations and progressively equipping all stations and trains with Wi-Fi and CCTV. ₹17,000 crores have also been allotted for augmenting Bangalore’s suburban railway network. The Government will quintuple the number of airports to 124 and connect hitherto unserved 56 airports and 36 heliports under UDAN, the regional connectivity program.  Around 9000 km of highways will be completed by the end of FY 2017-18 and over 35,000 km of interior roads will be completed in Phase 1.

Digital India – Integrated Education and Research – Major Focus

Under the massive ₹3,073 crore Digital India Program, over 5 lakh Wi-Fi hotspots will be set up to provide broadband access to 5 crore rural citizens. This opens up an avenue for individuals in rural India to access formal finance from digital lenders via the internet. New centres of excellence in the areas of AI, Big Data, Quantum communication and Internet of Things (IoT) will be established to boost indigenous intellectual capital in these crucial areas. An additional ₹14,500 crores have been earmarked for strengthening telecom infrastructure including BharatNet. To harness emerging technologies, particularly 5G, an indigenous Test Bed at IIT, Chennai will receive ₹135 crores.

The Government has launched a new program RISE (Revitalization of Infrastructure and Systems in Education) funded by a non-banking financing agency HEFA (Higher Education Financing Agency) with ₹1 lakh crore. In higher education, under the Prime Minister’s Research Fellow Scheme, 1000 B.Tech students will be identified and facilitated to complete PhD at India’s prestigious institutes.  Up to 24 new medical colleges are to be started and upgrade of several existing colleges was announced to ensure at least one Government College for each state in India. Two new schools of planning and architecture will also be set up in addition to 18 more IIT/NIITs.

Personal Tax

On the personal income tax front, there are no new changes in income tax slabs or structure.  However, a standard deduction of ₹ 40,000 will be introduced in lieu of transport and medical allowances while a higher allowance will be allowed for disabled individuals. From April 1, 2018, long-term capital gains of more than ₹ 1 Lakh will be taxed at 10% though gains until January 31, 2018, and will be grandfathered. Dividends from equity Mutual Funds will now attract DDT to perhaps discourage investors investing in Equity funds primarily for dividends. In an effort to promote gold as an attractive asset class, the existing Gold Monetisation Scheme (GMS) will be made more investor-friendly and a network of regulated gold exchanges will be set up.

Balanced Budget

Though the budget was projected as agriculture-oriented and farmer-friendly, it is balanced and well-intentioned. Huge boost to expanding and upgrading transportation infrastructure especially the railways and supporting underprivileged with healthcare, housing and employment are the cornerstones of this Union Budget.  Substantial measures in the areas of digital economy and education pave the way towards India becoming an economic superpower.

Oct 24, 2018

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Considerations While Applying For a Business Loan at a Financial Institution

New entrepreneurs with pioneering business ideas primarily need finance to keep their operations running. Banks have encouraged the growth of small-scale industries in India since independence by granting loans to promising ventures. However, the demand for funds did not quite keep up with the supply, and this resulted in the emergence of non-banking finance companies (NBFCs). The NBFCs supported the trend of industrialisation by granting business finance to those who could not procure it from banks.

The digital technology revolution in the second decade of the 21st century has given rise to a new breed of NBFC companies – the FinTech (financial technology) lenders. Employing a new models of lending, a FinTech company uses data analytics and social media tools to evaluate the creditworthiness of borrowers.

If you have begun a new venture and are seeking a loan for business expansion, you may have wondered who will be a more suitable lender – a bank or a digital NBFC. While there is more of interdependence than competition between these two sectors, you as the borrower have the privilege to choose what suits your interests the best. The loan that are you are eligible for will also be based on your business credit history and the availability of documents in support of the application.

Mentioned below are the points that will matter in the decision-making process:

Flexibility of sending application: At present, banks in India do not work on Sundays, second and fourth Saturdays and on gazetted holidays. Because you need to visit a bank branch in person while applying for business finance, it implies that there will be days when you cannot expect the process to advance towards the disbursal of your loan. Conversely, digital NBFCs by their very nature of operational medium can be accessed for business finance any day, any time. Therefore, Even if you are completely occupied with work on week days, you can apply for the business loan on a Saturday or Sunday and can still avail the loan within a time period as short as 3 days.

Loan processing time: Usually, it takes a few weeks before you actually get the required credit through a bank loan. Most of the banks in the public sector have to follow stringent rules in verifying the credibility of business organisations before they release funds into their accounts.

If you have an urgent need for money and cannot afford to wait for long, an NBFC loan from a FinTech player will be a better option. The entire line of processes from the submission of application to the disbursal of funds is digital and is therefore far quicker.

Collateral requirement: For years, banks have been lending to both individuals and businesses based on collateral that has to be pledged for security. This could be a residential or commercial property, gold holdings or any other asset that can be liquidated in case the borrower is unable to pay off the loan in the stipulated period. Even if a public sector bank looks at the regular income earnings of the borrower, it still requires collateral for additional assurance of getting back the amount lent with interest.

On the other hand, the NBFCs in digital lending industry do not ask for such guarantees through assets. They offer their loans solely on the creditworthiness of the business, which is evaluated by its dealings in the past and expertise in the field. If you are reluctant to offer collateral or simply do not have anything substantial to pledge, a FinTech company will still be willing to grant business loans in India.

Years in business: When was your business established? How old is your venture? For how many years has your business been up and running? Traditional lending institutions like banks ordinarily ask such questions when you apply for a loan through them. Generally, banks in public and private sector lend to organisations that have been operational for 3 to 5 years. Even conventional NBFCs require about the same duration before they can approve an application for a business loan. Such conditions however cannot be fulfilled by many start-ups.

The digital NBFCs have come to the rescue of enterprising individuals by granting loan for business even if their establishment has just completed a minimum operational period A one-year-old organisation with a convincing success story can persuade a FinTech company for business finance.

Nature of operations: Digital technology and social media have given rise to enterprises that were unheard of even in the late 20th century. Online platforms today sell everything from groceries and clothes to jewellery and appliances. Tickets for airlines, rail, buses and even tables in restaurants & hotel rooms are booked with a few taps on your smartphone. There are hundreds of other great business ideas that need to be uncovered. Banks and other traditional lending agencies have not yet started offering credit in full-faith to ventures of an unconventional nature.

The good news is that digital NBFCs are willing to support this generation of businesses. The FinTech industry has been increasingly lending to e-commerce companies, digital marketing organisations and other projects that use technology innovatively. Thus, all of this encourages progress and allows talented entrepreneurs to contribute to the Make in India initiative.

Prepayment penalties: Nobody wants to be debt-ridden. When you take a personal or business loan, you also wish to pay it back as soon as possible. However, the lending policies of traditional sources of finance in India have been such that borrowers are penalised if they repay early. The banks earn through interest paid each month, and to maximise this, they grant loans for longer tenures. If you have windfall gains in business and want to pay off your debt early, you may be charged at least 5% of the loan amount as penalty. That may be quite disappointing for an astute businessperson.

The new-age NBFCs have eliminated this trouble. There are no preclosure penalties when you get business loan from a digitally operating FinTech lender. What is more, their flexible repayment options give you the liberty to pay without straining your business operations or affecting your personal funds.

If the case for borrowing from a FinTech company looks convincing and positive, you can be the next business to get a loan from Capital Float. With a set of thoughtfully segregated loan products, we will be happy to support your business in its journey towards higher levels of growth. To know more about how the online NBFC business loans in India can help you, visit our website www.capitalfloat.com.

Oct 24, 2018

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Offers and Benefits at GIFF

We understand your working capital needs as an SME, and hence bring you the best of credit products in a comprehensive finance bonanza that extends from July 1 to September 30. Capital Float’s Great Indian Finance Festival or ‘GIFF’ offers you a one-stop shop for your working capital needs where you can choose loans with easy terms in an informed and beneficial way.

Why GIFF?

Taking a loan can be a stressful and arduous process for small business owners—from lengthy applications to intense verification and delayed disbursals. We at Capital Float know that timing makes all the difference. We wish to empower you to do what you do best—focus on your business. So let us take care of all the funding issues. You can focus on fuelling your ambitious plans while we power your growth engine by offering you the best of credit lines.

Here’s What You Gain

Not only does the Great Indian Finance Festival mean ease and speed of credit, it translates to something much more. It makes life easier for the growing pool of SMEs we engage with.

Gold: Avail a loan in the Flash Sale, and walk away with gold worth up to ₹10,000, depending on the loan amount borrowed.

Plummeting interest rate: It’s time to rejoice and tap into a great opportunity. Interest rates will be as low as 16%. A great boost for your business at a super-affordable rate is waiting round the corner!

Speedy application process: Now, there’s no need to wait in long queues at the bank. If you have an Internet connection, you can avail the best loan for your business on your smartphone, tablet, or from the comfort of your desktop. It takes less than 10 minutes to apply, and our cutting-edge processes help us disburse your loan in less than 3 days.

Let’s Celebrate Credit

We have already devised credit products that are attuned to the needs of small and medium enterprises. Here is what we have curated for the three-month online finance bonanza:

Merchant Cash Advance: Whether you are a restaurateur or a retail owner, there’s a high chance a majority of your revenue comes from clients’ card payments. You may then need to have consistent card settlements and short-term investments to meet your working capital needs. Merchant Cash Advance is your go-to loan, allowing you to access quick finance of up to Rs 1 crore, depending on your monthly card settlements. What’s more, you can avail of a loan that’s up to 200% of your monthly sales from card payment machines. In addition, the loan tenure ranges from 6 months to a year, on flexible payment terms. Fill out an application form in 10 minutes, get it verified within hours and get funds in as little as 3 days! All this happens thanks to our trusted partnerships with point-of-sale card machine vendors such as Pine Labs, Mswipe, ICICI Merchant Services, MRL Posnet and Bijlipay.

Unsecured Business / Term Loans: Business is about passion, but you may not always have received the backing so far. Our Term Loans and Unsecured Business Loans are tailor-made for you. We understand the worthiness of a positive cash flow and, based on this, are willing to lend you the short-term funds you need to grow and diversify. Our Term Finance helps you meet your working capital needs from Rs 1 lakh up to Rs 50 lakh over a tenure of 6 months to 3 years. Moreover, you don’t need to pledge collateral to get the loan.

Online Seller Finance: We understand the competitive world of e-commerce— the shrinking lead times, fluctuating levels of inventory, constantly changing pricing decisions and sky-high customer expectations. Our Online Seller Finance loans are designed for eCommerce merchants operating on online marketplaces. The funds received can be used to expand to other product segments, increase inventory or pay suppliers. We have partnered with leading online portals like Amazon, PayTM, Myntra, Shopclues eBay, etc. to service merchants like you operating on these marketplaces. We customise this credit line to your unique business needs, by analysing your monthly sales, projected revenue and other factors.We provide an unsecured loan up to Rs 1 crore or up to twice your monthly sales which mean that you no longer have to worry about expensive collateral to build your business online. No pre-closure charges and flexible repayment terms like fortnightly repayment will take your mind off financial burdens and let you focus on business growth. With the right documents and data, our Online Seller Finance can be disbursed within 3 working days.

Each of these credit offerings will run under Flash Sales, so watch out for announcements on the site. Each Flash Sale will run for 3 days and you can win exciting prizes apart from big discounts. So gear up to catch the right moment, and the right loan offer.

Clearly, GIFF is a goldmine of opportunities designed to serve SMEs across India. We will go along with you every step of the way, to help you realise your business ambitions! Visit www.capitalfloat.com/giff to know more.

Oct 24, 2018