How Flexi Business Loans Are Useful For Small And Medium Enterprises10 Apr 2019
No two days are the same in business. It’s about acquiring a new project one day and dealing with cash crunch the next. From the urgency of buying a piece of equipment to simply paying the vendors, suppliers, distributors, and other entities for their services, businesses need money for everything. While your product or service might be exceptional and unique, finance is its lifeblood, which keeps it afloat. It is therefore imperative that you have flexible sources of financial income to thrive on the opportunities and the challenges that your business faces every day.
In a dynamic business scenario, where you have running accounts with clients and service providers alike, Flexi Business Loans can become the turnkey solution for you.
Flexi loan features make them highly lucrative for an SME. They take the least amount of processing time, thus fulfilling any urgent financial requirement your business might have.
What are Flexi Loans?
Seasonal variations in a business or irregular funding requirements mean that it is not every day when you need a large amount of money. A sudden unexpected expense, a late payment from a client, or even temporary crunch in the capital amount may lead to a loan requirement. Flexi loans, with the liberty to “withdraw” and “pre-pay” the amount as and when required, are your best option in such situations.
In simpler words, flexi business loans come with a credit line, from which, the required amount can be withdrawn as many times as needed, as long as you stay within your loan limit. Similarly, you can pre-pay a part of the loan when you have a large sum of money at your disposal. In both cases, it helps in improving the general cash flow of the business, allowing you to take your venture to the next level without any financial hurdle.
Flexi loan eligibility criteria observed by many financial institutions, like KNAB Finance for instance, is that your business should be running for 2 years or more. In most cases, the loan approval is as short as 48 hours and you can receive the cash in your account within 2 hours of approval.
Types of Flexi Business Loans
• Flexi Term Loan: The loan amount comes with a limited credit line and interest is applicable only on the amount used. The EMI for this loan consists of both the principal and the interest. The amount in the credit line keeps reducing as you use the amount, however, pre-paying the principal amount does not revise the credit line.
• Flexi Interest-only Loan: Quite similar to the flexi term loan, here too, you get a credit line and the interest is applicable only on the amount used. However, pre-paying the principal amount increases the fund in the credit line in a flexi interest-only loan.
Benefits of Flexi Loans
• A flexi business loan requires minimum documentation as the tenure is relatively lesser than a traditional loan. In most cases, it is a collateral free business loan, unsecured and very easy to get.
• A few variants of flexi business loan allow only the interest to be paid as EMI, and the principal amount at the end of the tenure. Many of them also have a lower rate of interest.
• Flexi business loans offer high loan amounts up to Rs. 30 lacs, that in most cases are adequate for an SME to support its vision and fulfil a short-term goal.
• Unlike traditional loans where you have to bear interest on the whole amount credited to you, here, the borrower of a flexi business loan is charged interest on the amount utilized/withdrawn out of the sanctioned limit. This helps maximise savings too.
• The processing time of flexi loans is relatively shorter; thus, they are one of the best options when you want to address any immediate financial need of the company.
• Part pre-payment of the loan is allowed any time after the initial few days, that too, without any additional cost.
• You can withdraw the amount sanctioned to you as many times as you require, without any extra charges.
From conception to maturity, businesses cannot sustain without adequate financial support. Whether you have enough capital from raised funds and venture capitalists, small business loans are still a convenient option at every step of your firm’s journey. You can consider financial companies like KNAB Finance for their hassle-free process and ease of loan disbursement to fulfil your business requirements through flexi business loans!