What is Flexible Business Loan and Can It Lead to Lower EMI'S

Businesses need consistent cash flow. Whether you are thinking of venturing into a new industry segment or aiming to pay for the operational expenses of an already-established business, having access to sufficient capital is essential. And this is where flexible Business Loans come into play.

With the help of flexible Business Loans from Hero FinCorp, entrepreneurs and business people can get collateral-free loans with easy eligibility criteria and flexible repayment tenures.

Read on to learn more about this concept, different loan types, and the application process in this guide.

What are Flexible Business Loans?

Flexible Business Loans are unsecured loans or credit facilities prevalent among entrepreneurs because of their affordable interest rates, ease of application, quick disbursals, and flexible tenures.

Applicants benefit from a higher loan amount of up to Rs 40 lakh depending on various factors like repayment history, income, employment stability, credit score, etc.

Let us take an example here:

Mr. X has an approved flexible Business Loan limit of Rs. 30 lakhs for 3 years at an interest rate of 18% per annum. Now, it is up to Mr. X to utilise the entire loan amount for 36 months or apply for the required amount for a shorter term.

So, let us assume that despite the Business Loan offer made to Mr. X, he finally settled for Rs. 10 lakhs for 3 years at an interest rate of 18% per annum. In this case, the EMI amount for this loan would be Rs. 36,152. This is the benefit of a flexible Business Loan.

Also Read: Understanding What is Flexi Personal Loan and When it is Ideal

Using a Business Loan EMI Calculator

You can use a Business Loan EMI Calculator on the Hero FinCorp website to assess the monthly installment amount, formally known as equated monthly instalment (EMI), you would need to pay against the borrowed Business Loan. All you need to do is enter the required loan amount, the applicable rate of interest, and tenure, after which the free digital tool will show the estimated amount of EMI towards the loan.

You can also use the Business Loan EMI Calculator to compare different loan plans by changing the loan amount and tenure according to your requirement and the various lenders' interest charges.

Flexible Business Loan Interest Rates

Generally, the interest rate applied on flexible Business Loans varies from one financial institution to another and ranges between 15% and 30%. The interest rate offered also depends on the borrower's various attributes, such as income, employment stability, credit score, existing debt, repayment capacity, etc.

Fees for Flexible Business Loans

Associated charges for flexible small Business Loans include a processing fee of up to 2.50%. Usually, the tenure offered is between 12-60 months, but again it depends on the terms and conditions of the loan provider. Besides the processing fee, there could also be some legal or documentation charges that you may have to pay. Other than that, you would need to pay penal charges if you miss a payment.

Benefits of Flexible Business Loans

Some basic types of flexible business funding offered by financial institutions like Hero FinCorp include unsecured Business Loans designed for manufacturers, traders, retailers, wholesalers and even self-employed professionals.

Given below are some of the advantages of applying for flexible Business Loans are the following.

Higher Loan Amounts

Applying for Business Loans, whether for expansion or daily operational expenses related to your firm, can help you get a high loan value without collateral or security. You can easily avail a loan amount of up to Rs 40 lakh. The sanctioned loan amount will depend on your credit score and repayment capacity.

Quick Disbursal

Another merit of flexible Business Loans is their faster turnaround time, quick verification, instant approval, and fast disbursal. Once you upload all documents on the company's webpage, a quick verification of your credit score and other details will be conducted, after which you will receive the approval. In most cases, the loan amount gets instantly disbursed to your bank account without hassles.

Flexible Loan Tenures

Flexible Business Loans come with flexible repayment tenures from 12 to 60 months. It depends on your repayment capacity and ability to pay the EMI amount. If you are confident about repayment capacity, you can choose a short-term Business Loan of 12-36 months, resulting in lower interest rates. On the contrary, you can pick a long-term Business Loan of up to 60 months, especially if your company is facing some financial challenges, to repay the loan without hassles.

Prompt service

Quick, prompt, and professional service is another crucial feature of applying for flexible business loans. If you have any queries or want to revisit the terms and conditions of the loan, you can contact the customer service team of your loan provider to get clarity.

Flexible Business Loan Eligibility Criteria

To apply for flexible Business Loans, you must fulfil the following criteria.

• The applicant should be an Indian citizen between the age of 21 years and 65 years at the time of loan application and loan maturity.

• SMEs must have at least 5 years of business experience.

• The applicant should have a credit score of 700+.

The approval of your Business Loan application also depends on your loan repayment track, debt servicing ability, financial ratios, and your existing relationship with the financial institution.

Documents Required for Flexible Business Loans

Make sure you submit the following documents to avail of flexible business funding.

• The applicant should provide a duly filled application form and PAN card.

• The applicant should provide GST returns for the financial year, the latest audited financials and the last six months' bank statement as proof of income.

• The applicant should provide a Voter ID Card/ Photo ID issued by GOI/Passport/ Driving License/Aadhaar Card as proof of identity.

• The applicant should provide Aadhaar Card/ Voter ID Card/ Property Tax Receipt/ Driving License/ Utility Bill/ Registry Copy/Property Tax Receipt/ Lease or Rent Agreement as proof of address.

• The applicant should provide VAT/ Excise/ Sales Tax/ Service Tax Registration, Trade License/ Copy of partnership deed/ Registration Certificate issued by RBI or SEBI/ Certificate of Practice as proof of business continuity.

How to Apply for Flexible Business Loans?

Applying for flexible small Business Loans is pretty straightforward. Simply follow the three steps below:

Step 1 – Apply online for a flexi Business Loan at your lender's website

Step 2 – Upload all required documents

Step 3 – Wait for online verification, which may include an in-person meeting

Once your application is approved, you shall get a quick disbursement of funds directly into your account.

Conclusion

Due to its various advantages and perks, flexible Business Loans benefit self-employed and entrepreneurs. If you are looking for a flexible loan for your business, reach out to Hero FinCop. We at Hero FinCorp offer some of the most attractive and flexible Business Loans options with multiple benefits like a higher loan amount, flexible tenures, competitive interest rates, and prompt customer service. Additionally, these loans are paperless, collateral-free, and transparent.

However, before applying for one, check your eligibility criteria and calculate your loan cost and EMIs on the Business Loan Calculator.

FAQs

1. What is a flexible loan amount?

The flexible Business Loan amount is the highest loan limit you can avail of for business purposes. This varies from provider to provider and can range from Rs 5 lakhs to Rs 40 lakhs.

2. What is the minimum income for a Flexi loan?

You must have a decent monthly income for a flexible Business Loan to be eligible. However, at Hero FinCorp, we have not predefined any minimum monthly income.

3. How do I repay my Flexi loan?

Flexi Business Loans come with flexible repayment tenures of up to 60 months. You can choose a suitable tenure based on your repayment capacity and pay the EMIs as per the loan schedule.