How to avail business loans with <7% rate of interest in India?

With ever increasing demand for business loans to sustain & expand the line of operations in post pandemic world, it is imperative to optimize the rate of interest. With expertise and market knowledge our Chartered Accountants at GYC Advisory help your business to avail loans from reputed PSU’s and private banks at the lowest possible rate.

Earlier businesses had a limited number of options in the market to fund their financing requirement. However, the financial market in India has evolved multi-fold and offers a varied number of sources to businesses to fund their requirements for expansion. Firms can easily choose between the available options that best suits their nature of business.

The Reserve Bank of India (RBI) estimates the total addressable credit demand by the country’s MSMEs at $490 billion.

Business Loans still commands major control over the market as the primary source of funding for most of the businesses. Entrepreneurs can take their business to new heights of success if they can optimize the cost of such loans (rate of interest).

Key factors to avail the lowest interest rate when applying for a Business Loan:

1. Opt for secured loans

2. Property Mortgage

3. Use the loan for factory set-up, buying machinery or working capital requirements

4. Choose a longer tenure to lower the EMI

Types of Business Loans:

1. Loan Against Property:

Loan against property can be used to meet your business needs by pledging property papers as collateral security. Such loans can be used to meet the long-term funding needs, expansion plans, buy new property or to re-finance existing loans.

Loan Amount: Up to 70% of value of the property.

Repayment Period: 7–15 years

Terms: Interest rates starting from 6.5%

2. Working Capital Loan:

Such loans should be availed when a business experiences a cash crunch. It helps a business to manage the routine expenses such as salaries, rentals or creditors can put a strain on the business.

Loan Amount: From Rs 5 crore to Rs 200 crore

Repayment Period: It can be repaid as & when business has surplus funds. Interest needs to be services monthly

Terms: Interest rates starting from 6.5%

3. Term Loan:

Pledging collateral for a loan is a great way to lower the interest rate and have the access to a higher loan amount. A loan can be availed by a business by pledging its owned assets as security.

Loan Amount: From Rs 5 crore to Rs 500 crore

Repayment Period: 7–15 years

Terms: Interest rates starting from 6.5%

4. Loans for Machines:

Machinery & equipment is an integral part of any business and hence investing in it is imperative.

Such type of a loan can help you scale your business by investing in the growth and profitability of your operations

Loan Amount: From Rs 5 crore to Rs 500 crore.

Repayment Period: Up to 15 years.

Terms: Interest rates starting from 6.5%