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Disclaimer: This Article is for information purposes only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. The Bank makes no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Article. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from the Bank. The Bank, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein. Tax laws are subject to amendment from time to time. The above information is for general understanding and reference. This is not legal advice or tax advice, and users are advised to consult their tax advisors before making any decision or taking any action.
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No matter the size of your company, it will need capital through business financing to sustain itself. While you might have to wait a while to generate enough profits to reinvest in your business, an external source of funding in the form of a business loan from a bank can ensure that your operations run smoothly and uninterruptedly. A business loan can not only help you overcome financial constraints (say, unpredictable cash flow), but also give your business a much-needed boost and unlock its potential.
Whether you need funds to inject short-term working capital to meet operational expenses or long-term financing to expand your business, a business loan offers many benefits.
Quick approval, processing, and disbursement of funds by banks makes it easy for small businesses to avail of a loan. The paperwork is minimal, and while no collateral is required in some cases, you need to own property or land to secure the loan. Small and medium enterprises (SMEs) and large businesses with a minimum turnover of Rs.40 lakh that have been in business for at least three years and have generated profits for at least one year can secure a business loan from Kotak Mahindra Bank ranging from Rs.3 lakh to Rs.30 lakh.
Though it can vary from customer to customer depending on multiple factors such as creditworthiness, tenure of loan, and the viability of your business model, interest rates on business loans are affordable. They come with a nominal processing fee and have no hidden charges. You can check your eligibility criteria for a business loan and use an online EMI calculator to find out how much you will be required to pay.
Finance is a key factor that can help grow your business. You might want to increase manpower, expand your product range, or buy a new warehouse or premises. Getting a loan means you can put your plans into action much sooner and take advantage of any business opportunities that present themselves, resulting in faster growth. Especially now, with the government enacting business-friendly policies to give an impetus to home grown businesses through initiatives such as ‘Make in India’ and ‘Vocal for Local’. Kotak’s Strategic Business Loan with a tenure of three years and above can help you expand and take your business to the next level.
Business loans are flexible in terms of repayment options since banks design them keeping in mind the complexities and challenges involved in running a business. Kotak offers tailor-made financial solutions to suit the unique nature of your business and its requirements. You can choose a short-term loan to support working capital requirements or a long-term loan with a tenure of 5-7 years. Alternatively, you could opt for an overdraft facility. With flexible margin requirements and repayments that are in sync with your cash flow, Kotak’s business loans can help maximise the potential of your business venture.
Since the loan amount is received in a lump sum, owners are able to retain equity in the organisation. As an example, let’s assume you’re seeking an investor for additional capital. Chances are the investor would demand a share of the profits and a stake in your business, thereby reducing your control and ownership. However, with a business loan, once it’s been paid off, you will have no more obligation to the bank. Yes, banks conduct due diligence before approving loans, but once you receive the loan amount, you have the freedom to utilise the funds as per your preference and your business requirements.
Finding the right funding model for your business is vital. So, it is important to evaluate your needs before seeking a loan. This will allow you to see what type of loan is best suited for your company. Take sufficient time to read all the terms and conditions associated with a business loan before you go for it. A reasonable interest rate and a favourable repayment tenure can help your business scale new heights.
This Article is for information purpose only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. and its employees. We make no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Article. The information contained in this Article does not constitute legal advice. Kotak Mahindra Bank, its employees and the contributors are not responsible or liable for any damage or loss resulting from reliance on or use of any information contained herein.
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