Businesses often require external funding to manage operations, expand infrastructure, or invest in new equipment. In India, various types of business loans are available to meet different financial needs. Choosing the right loan can significantly impact a business’s growth and financial health. Here’s an overview of the most common business loans available in the country.

• Term Loans

Term loans are a popular choice for businesses looking for long-term funding. These loans provide a lump sum that is repaid in fixed instalments over a predetermined tenure.

Key aspects:

• Suitable for expansion projects, equipment purchase, or major operational investments
• Businesses could secure loans of up to ₹50 Lakhs or more, depending on their financial profile
• Typically ranges from 1 to 5 years, though some lenders offer longer terms

Financial marketplaces allow borrowers to explore and compare term loan options from different lenders, offering competitive interest rates and repayment terms.

• Working Capital Loans

Working capital loans are designed to help businesses maintain liquidity and manage daily expenses. These loans are crucial for businesses experiencing temporary cash flow challenges.

• Covering operational costs such as salaries, rent, and inventory purchases
• Loans of up to ₹25 Lakhs are commonly available
• Short-term, usually 6 months to 2 years

Businesses can explore working capital loan options on financial platforms, ensuring quick access to funds with flexible repayment schedules.

• Machinery Loans

For businesses in manufacturing or production, machinery loans are invaluable. These loans help finance the purchase or upgrade of equipment, allowing companies to enhance productivity and efficiency.

• Purchasing new machinery or upgrading outdated equipment
• Loans of up to ₹50 Lakhs or more, depending on the machinery’s cost and business requirements
• Generally, ranges from 3 to 5 years

Websites like Bajaj Markets provide access to various machinery loan offers, allowing businesses to choose the most suitable option for their growth.

• Invoice Financing

Invoice financing, also referred to as bill discounting, allows businesses to raise funds against their unpaid invoices. This type of loan ensures smooth cash flow while awaiting client payments.

• Meeting immediate working capital needs or funding new projects
• Up to 80% of the invoice value, depending on the lender
• Usually aligned with the invoice payment cycle, typically short-term

Businesses can access lenders offering invoice financing through comparison platforms for quick cash flow solutions.

• Business Credit Cards

Business credit cards offer a flexible line of credit to meet short-term financial needs. They are ideal for managing smaller, recurring expenses and come with the added convenience of easy access to funds.

• Covering day-to-day business expenses, travel, or office supplies
• Vary based on the business’s financial profile, often amounting to several lakh rupees
• Flexible repayment with options to pay the minimum due or the full amount

These cards often come with perks such as cashback, reward points, and discounts on business-related purchases.

Overdraft Facility

An overdraft facility allows businesses to withdraw more than their account balance, up to a pre-approved limit. This provides quick access to additional funds during times of need.

• Managing unexpected expenses or short-term cash flow gaps
• Based on the business’s credit profile and its relationship with the bank
• Revolving credit, with interest charged only on the amount utilised

Businesses can explore overdraft facilities through various financial service platforms.

Loan Against Property (LAP)

A Loan Against Property (LAP) is a secured loan where businesses pledge their commercial or residential property to raise funds. This type of loan offers significant funding at lower interest rates due to the secured nature of the loan.

• Ideal for large-scale investments, business expansions, or debt consolidation
• Loans of up to ₹5 Crore, depending on the property’s value
• Can extend up to 15 years, providing long-term repayment flexibility

Bajaj Markets is a marketplace where one can compare LAP options from multiple lenders.

Start-up Loans

Start-up loans are tailored for new businesses that require initial capital to set up and grow operations. These loans are typically based on the start-up’s business plan, expected revenues, and the promoter’s creditworthiness.

• Funding for office space, marketing, inventory, and recruitment
• Loans of up to ₹25 Lakhs or more, depending on the lender
• Typically ranges from 1 to 5 years

Entrepreneurs can leverage websites like Bajaj Markets to find start-up loan options that align with their business goals.

Merchant Cash Advance

Merchant cash advances provide businesses with funds based on their future debit and credit card sales. This type of loan is particularly useful for retail businesses and service providers.

• Short-term liquidity needs, such as purchasing inventory or managing operational costs
• Typically, up to ₹10 Lakh, depending on monthly sales volumes
• Flexible repayment linked to daily or weekly sales

Platforms offering merchant cash advances ensure quick disbursal and simplified repayment processes.

Conclusion

India’s financial market provides diverse business loans for different needs. These include working capital loans, term loans, and invoice financing. Businesses can explore numerous options for growth and cash flow. Platforms like Bajaj Markets help compare loan products from various lenders. By choosing the right loan, companies can secure the financial support they need. This helps them achieve their goals while maintaining stability.