Starting and growing a new business is hard work; it takes a lot of planning and dedicated effort, especially during the first few months. During this period, as a business owner, you can face many challenges, such as poor customer response, cashflow issues, inability to deliver orders on time and other logistic difficulties. And before deciding the pricing, you have to analyse competition, understand customer preferences and network with clients to establish your presence in the market. These aspects play a big role in how quickly your business turns profitable and can take time. Until then, you need to invest money regularly into your business and will need outside funds sooner or later to meet recurring or one-time major expenses.
From routine payments to suppliers to purchase of machinery, several factors can affect the cash flow in your business. Therefore, you need to periodically re-evaluate how much finance you will need to meet both short and long-term business goals.
Studies show that a lack of liquidity is one of the top reasons why most businesses fail. Therefore, it is prudent to opt for a Business Loan to cover shortfalls and confidently pitch for new projects.
Here are five reasons why you need to consider getting a Business Loan:
- Introducing the latest technology
Small businesses are increasingly adopting digital technology to provide a better customer experience. From machines that automate manual labour to POS (point of sale) or digital payment systems replacing cash registers and computer tools/software that ease business management; modern technology has become an integral part of running a business. And investing in new technology requires a large amount of capital for which a Business Loan can be an ideal solution.
- You’re building credit for the future
It is important for you to separate your personal finances from that of your business. A dedicated Current Account and Credit Card for business purposes can help you benefit from overdraft and pre-approved Business Loans. By paying your Business Loan EMIs on time, you can increase your credit score over a period of time which will make it easier for you to get goods on extended credit from your suppliers. This is because many businesses nowadays do a credit check before selling goods on credit.
- You need equipment for your business
Buying old and used equipment is not feasible as you need to pay additional maintenance costs and repair cost. While the latest equipment may cost more, it will help you recover the money you spend by providing increased production efficiency and consuming less power. A Business Loan can help you bridge the gap if you do not have the funds to purchase new equipment. It also provides tax advantages; interest on loans for buying machinery and other capital goods is tax-exempt.
- Leverage on new trends or opportunities
Many small businesses were forced to look for new ways to make money after the pandemic affected demand last year. For example, restaurants launched food delivery services to make up for the losses they suffered due to lockdown. Today, food delivery is thriving, with many regular restaurants switching to the cloud or delivery-only model. A Business Loan can enable you to take advantage of new market trends and develop new income streams.
- Maintain good cash flow
Sometimes, customers/clients delay payments for goods sold, and maintaining cash flow becomes a challenge, especially for small businesses. This, in turn, forces you to delay payments to your suppliers. Payment delays due to cash flow problems can not only affect growth; it can also have a serious effect on your business credit score. With a Business Loan, you can increase your available working capital and ensure good relations with suppliers and customers.
Your go-to business funding option
HDFC Bank offers flexible Business Loans of up to Rs. 70 lakh for short term and long term needs. Competitive interest rates, easy repayments and rapid disbursal are some of the standout features. Besides, you can also get payment protection insurance under our Credit Protect Plan. So, apply for a Business Loan from HDFC Bank and meet your business goals sooner.
Read more on how you can nurture your online business with a Business Loan here.
*Terms and conditions apply. The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances.