#Working capital loans
This is a modified loan alternative intended for business proprietors who need to explicitly finance their working capital requirements. These are the business loans that are ideal when one is running short of cash at hand and business operations have to be put on hold. Working capital loans can help in maintaining the regular cash flow so that production is not hindered in any way.
#Equipment Loans or Machinery Loans
Equipment loans are the business loan that provided to buy machines and equipment for business and to upgrade old ones as well. In simple words, machinery loan is an altered method for financing equipment or machinery, be it to rent, purchase, redesign, repair, transport or install machinery. A business could need computers, or new motors and the loan can be used to upgrade the workplace. This kind of financial support will also help you to train your workforce and maintain a specific machine.
Trade loan facility is basically for traders who deal in import, export as well as the trade at the domestic level. The nature of these loans is short term. The loan will be available for borrowers on specific transactions which used for sale or purchase the particular product.
#Start up Loans
Those who are looking forward to opening their own franchise business can opt for this loan. The money can be used to build stores or restaurants. The motive of the introduction of this loan is, to boost the ventures either new or existing. Govt. of most countries also step forward with launching various schemes so that startups can be funded. In India, NBFCs can be a choice for this kind of business loan.
#Professional Practice Loans
This is one of the types of business loans can be opted for by lawyers, doctors, chartered accountant, and engineers to set up their own office or chambers and finally start with one’s private practice. As a professional one can apply for this loan if qualify the required eligibility criteria.
#Flexi Business Loans
These loans have very easy repayment options and one can pay back according to convenience.
The loan kind can give you access to a credit limit of the most extreme sum that you are qualified for up to Rs.30 lakh. It also enables you to profit funds in light of your money needs when you require on flexible repayment tenor as The interest-only Flexi loan just requires the payment of interest and the principal can be repaid at the end of the tenure.
#Business Term Loan
This is a term credit with straightforward eligibility criteria, which enables you to acquire a sum as a rule up to Rs.30 lakh. It includes a Flexi repayment tenor and is offered at a nominal business loan interest rates. Even though term loans are of two kinds, secured and unsecured, a business loan is ordinarily unsecured. This spares you from including individual or business resources as security.
CIBIL Score Vs. Business Loan
A CIBIL score for a business loan is an absolute must because these are unsecured loans and all the lenders, especially banks, will check the score before approving the loan. For your loan request approval, your credit score must be more than 700. However, there are numbers of lenders who can provide you the loan at CIBIL score between 700 to 750 but remember then the loan interest rate will be higher.
If your credit score is very low, lenders will not be confident of lending money to you. Try applying for a loan with a guarantor. If the co-applicant has a better credit score, lenders will be more inclined to consider your case. You need to have a solid repayment plan in place so that you do not default on your repayments or cause trouble for your guarantor.
You can work on improving your CIBIL score by making all payments on time and repaying existing debts if any. Also, check your CIBIL report by getting a copy and check the same minutely to ascertain whether there are any incorrect entries or other discrepancies. You can report the same to CIBIL and get them corrected post which your score will improve. Also, make repayments on or before the due date and also try and cut out as much of your unsecured debt (credit cards) as possible.
Your overall debt levels should be low as compared to your income. Also, refrain from applying to multiple lenders at the same time since you will be perceived as being too hungry for credit. Besides these here are some tips that can improve your CIBIL score. What you have to consider is that you should keep these points regularly. As your CIBIL score not improve fast. It improves slightly.