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| Business Loan |
Conclusions are very important
for any business, but it becomes even more important when the business is new
or has recently started. In such a situation, opting for a business loan
is the most common solution for any business owner. However, obtaining a
business loan requires some detailed documentation that one may not have. At the
same time, you need to be eligible for it and have the ability to repay the
borrowed amount. Then the down payment is also a concern for the business
owners, as many of the lenders ask for it before approving any business loan.
However, few people know that business loans can be taken even without any down
payment. Let us discuss business loans that have no money.
Why
Do Lenders ask for Down Payments?
The down payment helps the
lenders to compensate for the risks involved. Lending to small or new
businesses is always considered risky as there is not much financial history to
rely on them in terms of repayment. Therefore, lenders call for a down payment
with the borrowers.
Most lenders want to know that
borrowers should invest in loans. Doing so reduces the risks. Providing a down
payment at the same time increases your ability to get approved for your
business loan. Making a down payment makes borrowers reliable and providing
collateral again adds a plus point to your business loan application.
This is why only a few lenders
are ready to approve your business loan application without any down payment.
Business Funding
without Down payment
Here are a few different ways by
which you can finance your business with no down payment or guarantee.
- Cash amount
- Business line of credit
- MMPI loan
- Term loan
- Working capital loan
Business Line of Credit -
A business line of credit is a way by which you can meet your business needs
without providing any collateral or down payment. The card has great
flexibility that allows customers to withdraw money as per their requirements.
Business lines of credit have an upper withdrawal limit and interest is payable
only on the amount borrowed. Repayment through monthly EMIs is simple.
SME loans - These loans
are commercial loans offered by banks or NBFCs to small and medium enterprises
that have the potential to grow. Generally, lenders do not ask for a down
payment, whereas the loan amount for this is less than that of a traditional
business loan.
Merchant Cash Advance - Merchant
Cash Advance is again a way to get money for your business based on any
collateral or down payment. Here the seller provides a lump sum to the
supplier. This helps merchants of small and medium businesses as they
experience more short-term cash crises than large industries.
Therefore, they are unable to
qualify for business loans mostly due to a lack of collateral and cash flow. The
Merchant Cash Advance helps them in such a situation by helping them to
maintain their demand and supply ratio.
Term loans- These days bank loans for new businesses are not the only option for business owners. Term
loans are the new introduction in the loan industry that can easily meet their
business needs. The loan is available for a short term ranging from one to five
years. Repayment is done in the regular period as per the loan agreement. The owners
have complete freedom to use the amount as per their requirements.
Working Capital Loans
for SMEs
Working
capital is essential for any business to
operate and gain growth. However, there are times when companies suffer from
the absence of working capital which leads to their failure. Under such
conditions, working capital loans by banks/ NBFCs or from investors can become
them to survive and continue their functioning. These loans are easy to get,
collateral and down payment free.
The above-mentioned points are the options for you when looking for
a collateral & down payment free business loan. However, you need to be
sure of your business plans and requirements before you apply with any of these
business funding options.
Apply for business loan at New Delhi Financial.
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