Business Loans India : Traders easy loan scheme from State Bank of India
Getting a loan is not always the cheapest way of financing, but it is often necessary and does give you more flexibility than most other options. If you do your research and follow some simple steps, then you will find the best loan for your business needs.
Types of loans
As with any type of loan, business loans come in various types and with various terms. Here are some of the options you should think about when getting a business loan:
Fixed vs. variable rate
As with most personal loans, business loans come in both fixed and variable rates. Fixed rate loans are better for those companies that have definite incomes each month, and so want to pay a fixed amount. Variable rates can save you money, but you remember to budget in case interest rates increase.
Payment types
Whatever type of loan you get, the most important factor is the way you will pay back the loan. The most common repayment scheme is to make equal repayments back each month until you pay off the loan in full and the interest amount. The interest level and the agreed loan term length determine the amount you pay each month.
If you want even lower payments then you can just pay the interest each month and then pay the remainder of the loan at the end of the term. This is good if you want really low monthly payments to begin with, but you need to remember that the loan term will last a long time if you only pay interest, and that the final payment will be very large.
Advantages of business loans
· There are many advantages to business loans, including:
· Retaining business ownership
· Financial flexibility and improved cash flow
· Easier budgeting
· Increased financial leverage
State bank of India offers loans for Traders on flexible and easy terms.The details of this loan Scheme is given here…..
Traders easy loan scheme from State Bank of India
Even if you can afford to pay for things with cash right now, getting a loan may mean you have more financial flexibility, and will leave your cash free when times are tougher. Of course, there are disadvantages as well, including the costs involved and the risks of default and repossession. However, if you need to expand your business or free up cash to get your business started, then a business loan could be right for you.This scheme is launched by State Bank of India to provide hassle free loan to Traders.Any business man/ entrepreneur/ Professional and self employed person can avail this loan. Loan under the scheme can be availed to meet normal business requirements and is sanctioned against equitable mortgage of property. Any residential or commercial property in the name of unit/ proprietor/partner OR their close relatives is acceptable. Agriculture property or property outside urban limits is not accepted.
The advance can be availed by way of Loan or Cash Credit limit. It can also be availed for Non Fund Based requirements (for issuance of Bank guarantees or LCs). Cash Credit limit or non fund based limit is renewable every 12 mths.Loan can be repaid in monthly or quarterly, even half yearly installments – as may be suitable to the borrower – in a period upto 5 years.
Minimum and maximum amount of loan is Rs 25,000/- and Rs 5.00 Crore. Margin is 35%. i.e. loan can be upto 65% of the realizable value of the property or the business requirement- whichever is less. Business requirement is assessed on the basis of projected business turnover. Interest at floating rate is charged at monthly intervals on daily reducing balance.
No Third party guarantee is required to avail the loan.
Sources : http://www.statebankofindia.com/