Types of Small Business Loan - Which One is Best for You

As a small business owner, you would need financing for different activities. Long term capital expenses such as investing in new immovable assets, fresh infrastructure, a new shop or branch, and so on need considerable amount of funding. On the other hand, working capital expenses such as paying off salaries, purchasing inventory or replacing old machinery, marketing expenses and so on require smaller amount of funding. There are different types of business loans that are suited for each kind of requirement, depending on the nature of expense, as well as the repayment period you need.

Check this infographic to know, in a nutshell, 10 different types of small business loans available. Most of these can be managed with a small business loan, whereas others like overdrafts and advances are very specifically targeted for short term funding requirements which can be easily repaid within a few months. Choosing a secured or a long term loan for a working capital requirement may not be the best choice, since the tenure for such loans are longer and it would be preferable to repay off such loans as quickly as possible to maintain a clean balance sheet. Similarly, choosing a short-term credit facility to fund large capital requirements would attract heavy interest charges, which if not dealt with properly, could land you into a mountain of debt.

Thus, it is advisable to research well and have a firm understanding of the business loan best suited to your own requirement as well as repayment capacity. SMFG India Credit offers unsecured business loans upto INR 75 Lakhs* at attractive interest rates which can be repaid within upto 60 months. Apply today to know more.

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