Businesses need ample amount of investment to fund expenditures related to expansion such as adding new lines to their existing products/services. In such a situation, business loans can come in handy as they provide much needed financial assistance to companies so that they can grow more competitive in the chosen markets. Like any other loan, a business loan is a debt which the company is obligated to pay back to the lender within a specific tenure according to the terms and conditions mentioned in the loan agreement. Start-up Business loans can be taken for a variety of essential requirements like starting up a new firm, business expansions, dealer and vendor financing etc.
The major benefit of business loans in India is that it often does not require any collateral and most of the banks sanction business loans with minimal pre-payment charges. Moreover special schemes are currently available including business loans for women, Mudra scheme for smaller businesses as well as small business loans for professionals. Another benefit is that if there is a failure of repaying the loan, then the business owner will not solely face the burden of penalties but the whole company will be liquidated in order to clear the business loan.