Types Of Business Loans
Working Capital Loans
To meet daily business requirements, expansion, cash flow, inventory, salaries etc.
Dhort-term loans up to Rs.40 lakh, with repayment tenure up to 12 months.
Term Loan
Categorized as short-term, intermediate-term and long-term loans.
Collateral-free usually offered up to Rs. 2 crore, also can exceed.
Letter Of Credit
Lender offers a funding guarantee to enterprises that deal in international trade.
Letter of credit can be utilized for both import and export purposes by entrepreneurs.
Bill Discounting
Funding facility in which seller gets an amount in advance at discounted rates from lender.
Asks buyers to contribute in the form of interest rate to increase the revenue.
OverDraft Facility
To withdraw cash from his/her account even if the account balance is zero.
Interest rate is charged only on the utilized amount on a daily basis.
Equipment Finance or Machinery Loan
To purchase new machinery or to upgrade the existing one.
Used by enterprises, which also get tax benefits.
Loans under Govt. Schemes
Schemes for individuals, MSMEs, women engaged in trading, services & manufacturing.
Include Mudra Scheme under PMMY, PMEGP, CGTMSE, Standup India, Startup India etc.
Point-of-Sale (POS) Loans
A business owner pays a lump sum amount in advance to suppliers.
To reduce the liquidity crunch in the business, merchants opts for it.
Business Loan Against Property
Businesses use their commercial or residential property as collateral.
Gains substantial funding with longer repayment periods and lower interest rates.
Gold Loans
Borrowers pledge gold to secure immediate funding,
Benefits from fast approval, flexible repayment, and lower interest rates.
Project Loans
Designed for large-scale projects like infrastructure or real estate developments.
These loans cover all project phases, from planning to completion.
Cash Credit
To withdraw funds up to a limit, with interest charged only on the amount used.
It's ideal for businesses with seasonal sales or irregular income.