Commercial loan: All You Need to Know

Commercial loan

For a business of any size, be it a microenterprise or a large-scale setup, timely infusion of capital can improve productivity, boost your business’ reach, help with inventory management and simplify logistics. However, you may not always know how to get the money you need.

A smart way of overcoming this hurdle is opting for a commercial loan. It’s a financial tool that you can rely on for major expenses that come your way.

What is a commercial loan?

Simply put, a commercial loan is granted to organizations to take care of business expenditure. Similar to a business loan, what makes a commercial loan different is that it isn’t issued to a person, but a business entity such as a company. A commercial loan is typically a short-term financing solution that may be secured by collateral or unsecured.

NBFCs, for example, offers a Commercial Loan of up to Rs.30 lakh on an unsecured basis, at an attractive commercial loan interest rate. Businesses can easily apply for one online after meeting the simple eligibility criteria. Moreover, you can take it as a Flexi Loan where you borrow as you need and pay interest only on the sum used. You can repay the loan whenever your business has excess cash at no extra charge.

How can you use a commercial loan?

A commercial loan doesn’t come with restrictions on usage. You can use it in the following scenarios.

  • To meet cash flow gaps
  • To buy, repair or upgrade equipment
  • To buy or lease commercial property
  • To expand your business
  • To refill your inventory
  • To finance innovation
  • To train and improve your staff’s skills

What makes a commercial loan a good financing option?

It is quick: Provided you access the right lender, a commercial loan gives you funds in no time at all. For instance, NBFCs pre-approved offers give you an instant approval on your commercial loan application. This means that you can meet urgent working capital shortfalls, capitalize on business opportunities that come your way and even replace malfunctioning equipment in a time-bound manner so your productivity isn’t compromised.

It is flexible: When you choose to take a Commercial Loan you can borrow it as a Flexi Loan. This means that you can borrow from the total sanction in parts, as and when you wish to. You only have to pay interest on the amount you use and you can also pay interest-only EMIs through the tenor. Thereafter, you can repay the principal at the end of the tenor. This option helps you manage cash flow better while saving you around 45%.

It is easy to manage: You can choose to repay your commercial loan within a tenor of 12 to 60 months, that suits your business’ flow of cash. Not only can you apply for this loan online, but you can also access its details through a secure online account.

How should you apply for a commercial loan?

To save time you can apply for a commercial loan online. Fill a short form with your personal information and financial details. Take care to fill all fields that are marked as mandatory. Then, a representative will get in touch with you to confirm your loan approval. You can submit the necessary documents and complete the procedure. With NBFCs, the process becomes even more seamless, as you just have to submit 2 documents to a representative who comes to your doorstep for document collection.

Make use of a commercial loan and ensure that a lack of funds doesn’t come in the way of your enterprise’s needs.