Business loan gives a much-needed boost to an entrepreneur's business, it can be a startup or an established setup business. A business loan owner can use the capital from a bank loan in the form of working capital to expand the business, or to buy machinery or equipment, acquire infrastructure, and buy inventory.
Many institutions offer secured loans, and they also have an upper limit on the amount they can lend. On the other hand, several banks and financial institutions also extend a line of credit that helps businesses to manage their cash flows.
Before taking any loan from a bank or a financial institution check the borrower's eligibility and evaluate various criteria such as the nature of the business. Some lenders may not require collateral or a guarantor when granting a loan. They may offer unsecured loans. Defaulting on the repayment schedule may result in the lender charging a penalty on the borrower or you may lose your assets.
Business loans can be divided into the following categories, any individual can avail themselves of the loan. These categories are divided upon different bases on the eligibility criteria.
1. Working capital loans
2. Business loans for women
3. SME and MSME loans
4. Machinery loans
5. Start-up loan
6. Term loan
7. Equipment financing
8. Loan against property for SME
9. Flexi loans
10. Loans under government schemes
11. POS loans or merchant cash advance