Boost your business this festive season with an unsecured business loan
If you fall into small or medium industry categories, then you require unsecured loans for your working capital as it is easy to apply. This post is regarding unsecured business loans for your organization which you can effectively use during festive season. Especially for your micro-finance this article well describes unsecured business loans for this festive season.
As you know that the coming festive season offers a lot of benefits and opportunities for the seasonal business. And we understand that the busy period is not that easy, you need to boost the festive sales, by providing the right products or services, by efficiently managing the business, by building the right product or service, storing it and then selling it.
Developing great products or services is not that easy, and you may need extra capital as working capital or overhead capital for your small or medium business. The cash reserves may be tight and we understand that.
Guidelines to every business owner to apply for a festive business loan
There are various retail businesses for which you need a business loan for the festive season, such as gadgets, electronics, appliances, clothes, groceries, accessories, etc. You need to either develop your products on your own and then sell it or store them as a retailer to sell them. You need business loans for the retail business.
The challenges for the retail business for the coming festive season are mentioned below.
- Low advertising/promotion budget
- Lack of Human Resources
- Inadequate stock
The wholesale business must gear up much before the festive season for selling. For example during the Diwali time you need to send your products wholesale much before the season to your customers. These might be one of the busiest periods for the wholesale markets.
As a wholesaler, you cannot escape the demand created by the festive season. You need to fulfill the orders received promptly for the festive season and business is expected to peak up.
There are few ways to peak your wholesale business for which you need the additional working capital. They are as follows:
- Modern tools
- More logistics and other technologies
- Additional stocks
E-Commerce – Online Business
For E-Commerce business, you need to market and sell products or services online. You will be competing with others who sell their products or services online. Apart from the above you need to advertise online and stock the inventory of products in your stores. The demands may wary and fluctuate while doing e-commerce. The traffic on your website may vary and you need to have great looking website to attract the customers.
The main factors contributing to the success of the e-commerce businesses are as follows:
- You need to have great looking websites to attract the customers
- The technology and bandwidth of the websites must be sound
- Stock and restock the inventory of your products
- Have a tie-up with the logistics and Courier Company to sell your products to the customers.
Advertise digitally for your products in the online markets.
Hospitality and Services Sector
The festive season is the prime time for the hospitality industries such as hotels, restaurants, boarding and lodging and resorts. All people will try to meet their friends, families, and relatives. You may need additional capital for the staffing resources, upgrading of the IT infrastructure, offer festive promotions and new services during this period.
The services industry such as spas, salons, maintenance industry, and home cleaning witness a hike during the festive season. One may need additional capital for new services and great offers during the festive season.
Why unsecured business loan for the festive season
The secured loans are those that require asset or collateral to be pledged while taking the loans. The banks and other financial institutions require assets or collaterals because when the borrower could not pay the loans then the banks take the asset or collateral instead of than for the unpaid loans. Usually, the asset or collaterals are of large amount than the loan amount and interest.
The unsecured loans do not need any kind of assets, inventory or collaterals to be pledged for the loans as they are very risky. Therefore unsecured loans carry less risk to the business than the secured loans.
The MSME industries need to decide well in advance for the festive season. However, unlike banks which require collaterals and many days for processing also large paperwork the unsecured loans offered by the NBFC companies such as FlexiLoans provide unsecured loans which are simple, fast and easy. They require just 2 working days for the processing time. And all the paperwork is done online.
Factors to consider applying for an unsecured business loan
Planning – You need to ask the question – “Why do I need a loan?” This will answer many of your doubts and questions. You may need loans for technology, equipment, storage, working capital, for staffing the resources and more overheads during the festive season. Once you have good reason your action plan is ready and you have better lucidity in utilizing the funds.
Lender identification – The next step is to identify the right lender. You may have to analyze this by doing some research and find out the lender who can provide you unsecured loans to your business. Not only that you need to analyze the paperwork required, interest rates, processing fee, hidden charges, and finally hidden clauses if any as well as how they can fund you. Some lenders may not cater to your type of business but may have specific choice of business. Hence it is required to identify the right lender for your business.
Settlement Plan: This step is very important. The lender must be convinced that your business is continuous and you can repay the principal amount and the interest to the lender. Your repayment plan must take into account the working capital needed, your monthly expenses and profit, your annual revenue after Tax, overheads, etc and can convince the lender that you can repay the borrowed amount and its interest. Another requirement is your credit score from the CIBIL agency which convinces the lender for providing you the unsecured business loans. If you do not have a healthy credit score then you may not get the loan or will end up paying more interest rates.
Document work: Most of the documentation requirement is mandated by the RBI or the Government. This is a very critical factor and the documents required may be PAN card, Address Proof, Bank Statements, Balance Sheet/Tax Returns, Aadhar card and GST registration/Shop registration. Each lender may require different types of documents for lending unsecured business loans. You need to verify and submit online the required documents.
Simple steps to apply for an unsecured business loan
- Form Filling – You need to fill the online application form. The details required maybe your personal details and your business details.
- Document Upload – You need to upload the documents online with very simple steps. No need for hard copy all the documents can be uploaded online. The document required may be PAN Card, Address Proof, Shop/Business registration Certificates, Bank Statements, and Tax Returns. You can also provide the credit score online.
- Approval – After submitting your documents and filling the online application form, it takes a few hours to get the approval and verify if the required documents are in place. To apply for the unsecured festive season business loans please Click Here!