How to successfully start your business?

Starting one’s own business takes a lot of time and effort. There are a number of factors one needs to keep in mind during the planning stages. One of the biggest requirements of any new business is a source of finance. Purchasing land, machinery, labor, raw materials, etc requires a lot of money. The startup also requires money to continue working until the business starts earning profits. Since most startups do not have the financial capitals to sustain themselves, several financial institutions offer a variety of loans to small and medium businesses to meet their financial requirements. Some of the loans offered are:

Property term loans

This type of a loan is offered which businesses which require capital for any expansion or working capital requirements. Working capital is the everyday requirements of a business to run. All businesses must strive to expand their markets to be successful. This loan hence can be used by the company to invest in assets which will help it gain a higher level of profits. The SEM loan interest rate charged is based in the market rates and one can apply for a loan of up to 2 crores. There is also a flexible repayment period of 8 to 15 years offered to the applicant.

Plant and machinery loans

Businesses which have their own manufacturing unit require a significant amount of capital to purchase their own plant and machinery. These are believed to fixed assets and hence most companies require and additional source of finance to afford them. It is for this very reason that financial institutions provide plant and machinery loans which allow the company to apply for loans to the amount of 10 crores for a maximum period of 6 years. Until the loan amount is repaid, the financial institution will keep the ownership papers of the plant and machinery purchased as security.

Medical equipment loans

Purchasing medical equipment takes up a large amount of capital. Most small and medium businesses do not have the funds to afford purchasing such expensive equipment. Owning the latest medical technology is the only way a business can prosper and grow. Hence financial institutions offer this type of an SME loan to a maximum amount of 10 crores for a tenure of 6 years. The SME loan interest rate charged to the business is based on the market rates.

Business loans

This is the only short term SME loan which is provided by financial institutions to startup businesses. What makes this loan different from the others is the fact that no security is required to be provided by the applicant. It is an unsecured loan which allows the applicant to borrow a maximum of 35 lakhs from the financial institution. Though the business loan interest rates are affordable, one must never use this loan to pay off bad debts. The loan must only be used to help the business grow.