Business Loans – From Research to Financial Contracts

Business finance is the activity involved in generating adequate funds to conduct and grow a business effectively. It entails expenses on raw materials, capital goods, land, accounts payable, payroll, purchases, inventory, taxes, and interest. The term “business” can refer to whole sectors or specific companies. For instance, small businesses are generally considered as a business concern, while large corporations are generally termed as enterprises.

India is emerging as a good destination for small business. Indian economy has shown strong growth in the past few years. This has made the country an attractive place for starting and expanding small businesses. Various factors contribute to this. Government policy and subsidies, favorable tax rates, lower exchange rate, low cost of living, access to cheap labor, adequate infrastructure, etc. are some of the key factors that encourage small businesses in India.

Finances are a crucial aspect for any business concern. Proper finance management helps entrepreneurs to achieve their set goals. Indian Small Business Association (ISBA), provides necessary assistance for the development of small business in India. It also guides businesses through various issues like finance, taxation, management etc. Indian Trade and Finance magazine are another source of information for the working capital requirement of small businesses in India.

Commercial banks and financial institutions in India offer several commercial finance options to borrowers like secured and unsecured loans, business finance, business credit, and debt financing. With the increasing popularity of online business loans, more business concerns are turning to online financing. Online financing enables businesses to avail funds quickly, conveniently, and at competitive interest rates.

Two types of receivables finance are available in the market: secured and unsecured. Secured receivables finance can be used for purchasing raw materials, equipment, and machinery. And can be availed against a property or personal real estate. However, unsecured receivables finance can be used for almost any business purpose as well as can be used to obtain credit. The secured form of receivables finance offers a low risk with low interest rates, while unsecured form of receivables finance has high interest rates and is riskier.

Most of the large manufacturers in India follow the manufacturing line and they use financial institutions for debt finance. Most of the leading retail stores also follow the manufacturing line and they use financial institutions for debt finance. Various other small manufacturers in India follow the manufacturing line as well. For them, debt financing is an important option. Indian Manufacturers generally sell goods directly to the end users.

Indian Financial Services Association (IFSA) offers loans to Indian small and medium scale industries which enable them to establish themselves in the domestic market. Several other organizations offer similar services to the SME sector of India. It is up to the entrepreneur to find out which organization he/she should approach for assistance. Indian Financial Services Association offers various loans and financial schemes through their website which are offered by various Indian Banks and Financial Institutions.

If you are a business owner, you can make use of these resources for your benefit. These organizations are very helpful for all kinds of business firms, whether you are starting new businesses or expanding old business. You just need to find out the financial institution that can provide you with the funds that you require. If you are looking for funds for expansion of your business firm, then it is better if you seek help from a financial adviser who is well experienced in this field. Proper consultation with the financial manager can make a great difference between success and failure of the firm in the future.

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