When a company thinks about growing and expanding its business, it knows that financing is one of the essential tools that it will need to do it. The liquidity that we obtain from it can be used to buy new material for the company or to make an investment in research that will turn into growth in the short, medium and long term. In that case you take help of start up business loan.
That is why there have already been many companies that have decided to access new avenues of financing to move their SMEs forward. During this last decade, private capital companies specializing in financing for companies have started to be created. In this case, they are online companies that grant small business loans for SMEs and freelancers quickly and agilely. These companies are based on web platforms that pursue the objective of making the procedures less tedious and reduce paperwork to increase the possibilities that grant them the loan.
Funding for companies has changed a lot in recent years. According to data published by the main surveys of central banks, it is expected that financing for companies will continue to grow throughout this year.
The first thing is to look and compare the Total Financial Cost:
The business loan interest rate charged by banks is only one of the components to reach the total cost. Then you have to add administrative expenses, granting commissions and various insurance. In addition, it allows a much more homogeneous comparison between the proposals of the different banks. The entities are obliged to inform it, even every time they advertise a certain line. And in the case of personal lines can be a decisive fact, especially for short terms.
Think twice before embarking on a long loan:
Of course the longer the term, the lower the fee. But extending too much when you do not really need it will force you to pay more interest for much longer. That money could have used it for other consumption, instead of “giving it away” to the bank. If you think, for example, that one year is enough for the return of the credit, do not extend unnecessarily. And in any case, if you pay all the installments in the foreseen terms, you will not have major problems to take a new one later.
Beware of very cheap rates:
In recent weeks several banks went out to advertise unsecured business loans at rates below 30% per annum, that is, levels very close to inflation. But you must be extremely cautious with this type of offering. It happens that in general they go hand in hand with very long loans, which exceed 36 months. The problem is that as downward inflation is expected; staying in debt at 30% when inflation could fall to 17% or less within a year is extremely onerous. Therefore, a business loan in Delhi is preferable, even when the rate is higher. Remember that the incentive of banks will be to ensure a high rate for as long as possible to improve their profit levels.