Business Term Loans – All You Need to Know

Term loans are such loans that need to be repaid in monthly instalments over a fixed time period. These loans find their usage among credit seekers wanting to employ the money for numerous personal and business needs.

A business term loans is quite similar. Businessmen avail this loan when in need for funds to be invested in a business. These loans can be either secured or unsecured, based on whether an asset is pledged against the loan or not. Unsecured financing, however, is easier to avail as it involves lesser documentation and quick disbursal. Trustworthy lending institutions like Bajaj Finserv sanctions these types of collateral-free funds for businesses and supports their growth. They are typically divided into a short-term, intermediate-term, and long term loan.

Here is a brief insight into these 3 types of term loans:

  • What are short-term loans?

These loans have short repayment tenors, usually less than a year. A short-term loan is generally availed to meet crunch situations faced by an organisation so that the workflow is not hampered.

  • What are Intermediate-term loans?

Repaid in monthly instalments, an intermediate-term loan lasts for less than 3 years. This type of term loan is best for establishing small businesses and helps them develop a strong financial background.

How to boost your chances of getting such loans?

The presence of a suitable business plan boosts your chances of getting such a loan sanctioned. The audited business turnover and your Income Tax returns will help to showcase your credibility in front of the lender.

A good CIBIL score will further strengthen your chances of getting the loan sanctioned.

  • What are Long-term loans?

Loans that are commonly set between 3 to 10 years of repayment tenors are called long-term loans. A long-term loan is mostly availed to boost the working capital of a company, invest in the infrastructure, or enhance other business possibilities.

Flexible repayment option allows companies to divide their loan across a long tenor without worrying about the repayment instalments. A long-term business term loan helps in smooth functioning of the venture over a period of time and thereby, increasing the stability. As a result, the venture goes on to create a reputation as a credible organisation in the market.

The best use of long-term loans is where major improvements or large capital investments are needed.

How to boost your chances of getting such loans?

To avail long-term loans, you must possess a good credit score and a proper repayment history. Financial lenders also check for the business vintage, market credibility, audited turnover and individual income tax returns of the owner.

When you avail business term loans, you get various benefits and features that your lender offers. Here are some of them-

  1. Affordable interest rates:

With a competitive interest rate, most business term loans offer suitable borrowing conditions for a company. You must opt for banks and NBFC’s offering minimum charges and processing fees.

  1. Customizable tenor:

Another important feature to look out for is the option to customise the tenor of your loan. Term loan repayment tenor ranges from 12 to 60 months, allowing a business to grow and repay after it starts generating revenue.

  1. Fast approval:

Avail business term loans only from lenders who provide quick approval. Such lenders will prioritise the approval process allowing the fund to be disbursed within 24 to 48 hours after the applicant meets the simple eligibility criteria. Bajaj Finserv also has pre approved business loan offers for existing customers that required lesser documentation and eventually speed up the entire process of receiving the desired loan.

With the freedom to choose between many reputed companies, always opt to avail a term loan from a trusted lender with affordable interest rates, flexible tenor, minimum processing fees, and no hidden charges.

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