As a self-employed individual, you may face several challenges while running your business. Market competition, inadequate manpower, obsolete machinery, limited production, little to no advertising, etc; are common issues that you might encounter daily in the SME industry (Small and Medium Enterprises). All of these problems can be solved by adequate funding. And while it may be hard to get investors for a small business, a business loan can be a perfect way out!
If you are a self-employed individual and thinking of applying for an SME loan in India; here’s what you need to do:
- Ascertain your needs: Make a list of your requirements and ascertain how much funds you require to cover them. You can also account for additional funds for emergencies or extra costs. Once you have a number in mind, use the business loan EMI calculator to determine the ideal tenure. If you think you will be able to settle the loan amount in the stipulated tenure; go ahead and apply for the loan.
Do not pick a high loan amount that you might not be able to pay back. Similarly, do not pick a low loan amount that will be inadequate for your expenses.
- Compare business loan interest rates: It is important to pick a loan with affordable business loan interest rates that you can repay easily. Some lenders may charge exorbitant rates for an SME loan. Not being able to pay back your loan can lead to severe legal; financial complications for you and your business. So, make sure to thoroughly scan all options and pick the one that is affordable and does not eat into your company’s profits.
- Pick a loan without collateral: Getting a loan can be hard if you are operating on limited funds and assets. Thankfully, not all lenders ask for collateral so make sure you pick the one that does not ask for it.
- Pick a suitable lender: Pick a lender that offers a long repayment term and structured business loan EMI plans along with low business loan interest rates. Check for relaxed business loan eligibility rules so you can get a loan with minimal fuss. Also, look for flexible payment options, minimal documentation and quick disbursements. It is also important to look for a lender that offers small as well as big loan amounts that fit diverse needs.
To sum it up
Self-employed individuals can greatly benefit from a business loan. Such a loan can help you hire more people, buy better equipment, advertise your products and services, and a lot more. So, make sure to use this option to expand your business. But remember to compare different loan providers and pick one that accommodates your repayment capacity so that you can pay back your loan smoothly, on time.