To make best use of business opportunity- Lack of funds or non-availability of collateral security to pledge with bank should never be a reason to pass up on a great growth opportunity for your enterprise. A business loan can give you the financial support to realize your business potential and dreams.
To tide over a difficult phase in business- Business is always full of uncertainties, there could be times that the business gets impacted due to external factors, like pandemic waves, international conflicts, change in regulatory environment or sometime internal issues can also impact businesses like, partners parting away, machinery break down, fire, theft and many more. It has been observed that timely infusion of funds, like medicine can save the businesses from falling sick and can help in reviving the growth.
You can get this loan without any collateral, which means no asset is required to be pledged to avail this type of financing.
An overdraft facility is a revolving line of credit, wherein the lender will provide you a limit for an approved amount in your bank account. You can borrow money up to the sanctioned limit, based on your needs. Interest will be charged only on the amount utilized. An overdraft facility or credit line can help you resolve short-term cash flow issues for your SME and meet other operational funding needs.
A Dropline Overdraft is a hybrid credit facility that gives borrower to enjoy flexibility of the traditional overdraft limits as well as benefits of a term loan as it gets repaid within a fixed tenure unlike traditional overdraft facility which gets carry forward perpetually. This facility allows a borrower to overdraw cash from his/her current account or a virtual account up to an agreed limit, wherein the withdrawal limit reduces each month from the sanctioned limit. The interest rate is paid only on the withdrawn cash and not on the total borrowing limit. Money can be deposited anytime to reduce the outstanding balance. Interest rate is calculated on a daily basis and is charged at the end of each month.
If the initial tenure of the overdraft facility is 60 months and the original overdraft limit granted is Rs. 10 lakhs, then after 1 month the operating limit shall automatically be reduced by 10,00,000/60 = Rs. 16,666. This means that the operating limit available at the end of the first month shall be (10,00,000 – 16,666) = Rs. 9,83,334. This calculation shall proceed for the second month as well and each month further, up till the last month of repayment tenure.
The unsecured term loan facility is the most easily availble credit facility offered by banks and non-banking finance companies. This facility gives your SME the option to take out a loan for working capital needs or other immediate funding requirements. It has a fixed EMI and the loan repayment period is generally up to 36 months. Rate of interest generally varies from bank to bank as it depends on various factors like credit score, financial strength and credit risk profile of borrower. However, stay assured the team at Veramigo has an expertise in finding the best suitable offer with best rates and amount to match your requirement.