Your start-up may be driven by a great business idea and have the required skilled labor and drive to make it big. But its success depends on having ample funds from the right source at the right time. A lack of funds can result in insufficient working capital and outdated technology and machinery, which lead to dissatisfied clients, low standards of operation and supply chain inefficiencies.
While you can find various business loans that are specifically designed for this purpose, you may not be able to afford the high-interest rate. Further, some lenders expect you to have a minimum business vintage of at least 3 years or submit collateral. This is why it’s a worthy idea to apply for a self-employed loan. You can secure a high amount at a low rate, without security.
Here are 5 reasons why you should make this move to grow your start-up.
- Simple eligibility and document requirements
Expenses like machinery repairs, software updates, and the likes can show up out of the blue. In such cases, a loan against property is the best funding option as it has simple eligibility criteria that make way for a quick approval. Meeting all or most of these can speed up approval and give your start-up the funds it needs in a jiffy. Further, loan against property documents required is minimal, ensuring that applying is simple and fast too.
A loan against property offers a sanction of up to 75% of the property’s market value. For instance, Bajaj Finserv offers a loan amount of up to Rs.1 crore to salaried, and Rs.3.5 crore to self-employed applicants through its Loan Against Property. With such a hefty sanction you can cover business expenses of any nature, whether you want to upgrade software, procure inventory, lease equipment, pay for advertising or buy a warehouse. You can also do so at the right time to capitalize on growth opportunities.
- Affordable interest rate and flexible tenor
Loan against property interest rates is lower than those of unsecured loans as the former category are backed by collateral. Further, if your property is in good condition, the lender may offer a rate that’s even lower. This, in turn, results in affordable EMIs and credit cost, allowing you to save a significant sum.
- Flexible borrowing for unpredictable expenses
As a start-up, you may have to meet various kinds of unpredictable expenses from time to time. To pay them with ease, lenders like Bajaj Finserv offer a Loan Against Property on Flexi Hybrid terms. This lets you withdraw from your sanction as per your needs, so you can get funds when you need them, without having to submit a new loan application each time. Further, you pay interest only on the utilized amount, resulting in significant savings. Also, to manage your cash flow better, you can choose to pay interest-only EMIs for up to 4 years of the tenor and make repayments towards the principal thereafter.
- Top-up loan to meet additional business expenses
You may consider expanding your business or may require additional funds urgently to increase production capabilities. In such cases, applying for a new loan may seem to be the only feasible option. However, it can be time-consuming and risky, as lenders may not want to approve a loan considering you have already taken one. In such cases, an existing mortgage loan can be quite helpful, as lenders like Bajaj Finserv offer a top-up loan over and above the existing loan against property in India. This allows you to secure additional funds without breaking into a sweat.
Thus, with a loan against property for business, you can fund your start-up’s financial requirements efficiently and improve profitability too.
7 Signs Your Business Face Financial Trouble
Within the last few decades, many companies, from high-profile mainstays to small local businesses, have fallen by the wayside. While some of those closures, administrations, and liquidations come seemingly out of the blue, there are somewhere in actuality the warning signs for the business were there before the final nail was driven in.
Listed below are seven key signs your business is in financial trouble.
Your Cash Flow Is Imbalanced
As the word goes, running a business, “cash is king.” An easy cash flow, where enough arrives to cover your outgoings, is key to keeping your organization operating. However, this flow could be sensitive, especially in small businesses. A supplier or customer perhaps not spending punctually may impact your cash flow, as may premature expansion or overspending in times wherever in actuality the going is good.
Negative cash flow is appropriate in the temporary while a fledgling company sees its legs or in the aftermath of an important expansion. But without positive cash flow, in the future, a small business cannot pay its costs and thus cannot survive. If your fund office is postponing spending its costs or team, it may indicate imbalanced cash flow.
Creditor Pressure Is Growing
The best way to help keep your creditors happy and minimize the pressure on your own company’s shoulders is to cover them on time. If your outgoings outnumber your income, it’s tempting to delay spending invoices. But doing this is just a sure-fire treatment for sour relationships along with your creditors, who may start chasing you for payment.
This may start the slippery slope into further trouble, as they’re likely to carry on chasing you until your debts are paid off. Creditors could even resort to legal action in an endeavor to retrieve their money, and you might wind up facing bailiff action.
You’re Always Refinancing
Refinancing alone isn’t an indication of financial trouble; it is a legitimate way of freeing up cash tied up in company assets by borrowing money secured against an assets’value. It can be used to lessen rates. While refinancing once isn’t abnormal, the business must manage to afford the repayments. If it occurs usually, it could be a sign of higher financial problems, and lenders may become cautious of companies continually refinancing, which may lead to more economic troubles later.
Until you are the main trader, staff are one of the very most vital the different parts of your organization, and employee morale often correlates along with your company’s health. One of the very obvious signs of financial trouble linked to staffing is layoffs and cutbacks in employee benefits, bonuses, or even a pay freeze.
The business could also change its contracts with staff, reduce hours, introduce zero-hour contracts or make staff work more for the same money. Doing so risks souring relationships along with your personnel and could cause to another location point.
Bad Company Atmosphere
Reducing advantages while increasing objectives on personnel will likely result in a bad environment and a drop in work satisfaction. Work can become less of a place of work and more of a place for fighting fires, constantly coping with problems instead of being productive. Team may lock onto that downturn and modify the atmosphere and start causing higher figures, too, taking people back to the last position about staffing issues.
Counting on Individual Contracts or Projects to ‘Sort It Out.’
Whenever a small business is operating healthily, it will have many clients or customers on the books with consistent income. Businesses in a less healthy position might put more weight on the agreements they do have. If one improvements company or stops being fully a regular source of business, the consequences will have an even more detrimental impact.
You could notice the company is relying more on fewer clients or focusing all of its efforts on acquiring new ones to the detriment of those they already have. This could sour relationships with existing customers and be described as a sign the directors are desperate for income.
Your Customers Have Noticed
Clients are very good at spotting when things change, and if they feel they’re getting less while paying the same money, they’re unlikely to stay quiet. If your employees are unhappy, prices suddenly rise, or benefits such as loyalty programs are scale back, rumors may start circulating, customers may start asking whether you’re closing, and in the worst-case scenario, it could get found by local or national media.