A small business on a daily basis faces a series of reciprocities with the big players in the market. In the present business scenario of competition, a business owner has accounts running with distributors, suppliers, and other entities. It goes without saying finances are the lifeblood of a business. So, it is imperative to have finances ready. Also, these flexible finances should be enough to keep the pace of opportunities as well as challenges in the business environment.
No matter what the requirement is, whether for training the workforce or financing new machinery, for a marketing campaign or to make the best use of a business opportunity, ready to use finances are always required. A flexi loan is a new age loan designed for business owners who are in urgent need of funds to run their business. This new financing option is customizable according to the business funding needs and requirements.
What Is Flexi Loan?
Flexi business loans are a type of loan where a loan limit is sanctioned. The business owner can use the funds as and when required. Through flexi business loans, the businessman can fulfill all his needs related to the capital crunch, equipment or machinery purchase, manpower training, expansion and growth, and much more. This type of loan is offered by a number of loan lenders in India.
Read on to know the other various aspects of the flexi business loans:
Access to Loan
This is the most important and helpful aspect of flexi loans. The most common flexi loan limit is Rs. 1-5 lakhs. The business owner can use funds up to pre-approved loan limit to meet his various financial needs. For bank loans, the business owner has to undergo rigid scrutiny under different and strict parameters. However, for a flexi loan offered by NBFCs, there are easy eligibility criteria. The credit score and a few other parameters are important to get the loan sanctioned.
Flexibility to Withdraw
The owner has the flexibility to withdraw funds as and when required. With a flexi loan for business, he is able to withdraw funds and even prepay them as per business budget and needs. For instance, if the flexi loan limit is Rs. 5 lakh and the business owner just require Rs. 3 lakhs, he can withdraw the amount. Now during the course of the loan, if he thinks that he only needs only Rs. 2 lakh, he can prepay Rs. 1 lakh. And if he needs more funds in the future, he can always re-borrow the funds he had repaid earlier.
High EMI amount may affect the working capital of the business. But the flexi business loans can be repaid in easy EMIs that suits the budget of the business owner. Also, when a flexi loan for business is availed, the interest is charged only on the amount that is withdrawn. And not on the loan limit. The loan EMIs consist of principal and loan amount. And the entire amount can be divided into easy installments that can be repaid over a time period.
Flexi business loans are designed in a way that they make funds easily available for business owners and in the shortest possible time. It also restricts the business owner to undergo cumbersome paperwork. Once the loan application is approved and the loan limit is granted, the funds can be withdrawn any time. Also, they can be transferred to the business account at any time and from anywhere.
Flexi loans are certainly an innovative loan option where the business owner gets access to ready funds. He is not required to apply for loans every now and then. All he has to do is avail the loan limit once and use the funds until the loan limit expires. There are several loan lenders in India who offer this type of loan scheme. In addition, these loans are unsecured in nature. The business owner is not required to offer any kind of collateral to get the loan amount sanctioned. Thus, this type of loan is an ideal choice for small business owners in India as well.