Why should I take a Business Loan in Mumbai?
Mumbai with a population over a million is the finance capital of India. Mumbai is host to almost all types of industries. Be it banking, finance, IT, entertainment industry, food and cutlery, wedding planning, medicine and hospitals, transport, construction etc. everything can be found in Mumbai. Be it a fresh entrepreneur or a company older than a century, everyone needs a loan for their respective businesses. Running a business in an extremely competitive city like Mumbai is not so easy. So whenever you find yourself in need of credit to expand or fund your business for multiple reasons, you have an option to choose a business loan. Buy getting a business loan via Ruloans is best option in Mumbai as we help you borrow right as per your needs.
Banks and NBFCs in Mumbai also offer special loans for women entrepreneurs. They are customized business loan plans for women to cater their needs and give them a chance to build a competitive business in the market.
Businessmen or entrepreneurs take Quick business loan to meet with their various business related needs. We have listed a few of them below:
- Business loan for working capital:
Even in an ongoing business in Mumbai, businessmen require ample amount of funds to sustain and fund for their daily operations. These loans help them to be sustainable soon and it can be paid off once the business starts to grow. This type of loan comes handy in a situation when the business earnings are not adequate.
- Business loan for business expansion
Every entrepreneur wants his or her business to flourish beyond the boundaries of Mumbai. This thought comes to their mind when business starts to grow in Mumbai and there is a positive flow of profit. Businessmen understand the need and urge to expand their own product i.e. the very own business. But expanding the business beyond Mumbai's borders is not easy, financially speaking. It surely needs a strong monetary backing to meet with the needs of expanding the business. Whether its location, equipments, new recruitments or paying for new communication channel, businessmen need a bucket full of finance. Thus they should opt for business expansion loan. By taking this loan, businessmen can make sure that their respective business touches new heights of success.
- Business loan for buying machinery or equipment
Almost all types of businesses in Mumbai need specific machinery or equipments for smooth functioning. Many times these equipments are higher in price. Thus businessmen should opt for this type of loan to buy such equipments and pay it off with profits which will come from the use of these equipments or by putting them out on lease later.
- Business loan for developing infrastructure
Having a well built exquisite infrastructure is one of the key points of a business in Mumbai. Your clients many times judge you from the infrastructure you work within. Also it is easier to many businesses to have a well sorted customized infrastructure for smooth day to day affairs. Obviously having any kind of infrastructure, small or large, does not come in cheap in Mumbai. Thus businessmen should opt for this type of loan.
Advantages of Fixed Interest Rate for Business Loan:
- 1. Fixed rate in fluctuating market conditions
- The businessmen don't have to be in worry of constantly changing interest rates in the market. Even if the interest rates go high, the businessmen pay the fixed amount of EMI, unlike floating interest rates. The businessmen can save an ample amount of money on this difference.
- 2. A boon for those businessmen with a strict budget:
- Many times the businessmen, who have taken a loan, have strict financial budget to pay EMIs and other monthly requirements. Such kind of businessmen can't risk the market fluctuation. With fixed interest rate, they get a notion of security. They can plan their finances in the future as their EMI amount will be rigid due to fixed interest rate.
Disadvantages if Fixed Interest Rate for Business Loan:
- 1. Higher interest rate amount:
- In fixed interest rate, the businessmen have to pay nearly 1% to 2.5% higher than the ongoing interest rate. This additional payment results as loss for the borrower. This exact interest rate amount is decided by the banks and NBFCs. And they change as per their policy.
- 2. Zero benefits of decreasing interest rate:
- If the interest rate decreases in the market, the businessmen don't get any advantages of that. The businessmen has to pay the previously decided amount where as other borrowers who have opted for floating rate, enjoy paying much lower EMIs.
Floating Interest Rate for Business Loan
In this type of interest rate, the interest rate on the principal loan amount changes as per the fluctuating interest rates in the market throughout the tenure. With this interest rate, businessmen have to pay different amount of EMI every month with surprise fluctuations. The floating interest rates are linked to NBFC's base rates and bank's MCLR i.e. Marginal Cost of Lending Rate. These rates depend on Reserve Bank of India's quarterly base rate announcements. If the businessmen opt for this type of interest rate, he or she gets to pay lower amounts as compared to fixed interest rate.
Advantages of Floating Interest Rate for Business Loan:
- 1. Benefits of decreasing interest rate:
- When the interest rate in the market falls, the businessmen enjoy a decrease in the EMI amount. The businessmen can enjoy this benefit of decreasing market rate. Many times financial leaders predict increase and decreases in the future interest rate. So if the prediction is of decrease then the businessmen should definitely opt for this type. The variety of interest rate helps the businessmen to pay less.
- 2. Cheaper than fixed interest rate:
- Floating interest rates are cheaper compared to fixed interest rates as they change from time to time. As mentioned above, fixed interest rates are 1% to 2.5% higher in value of floating interest rate. So the businessmen surely get benefits of that difference.
- 3. Saves funds:
- If the market rate goes up, it surely decreases after a specific period and gives the businessmen a chance to recover the loss in higher interest rate. So it basically helps the borrower to save more by helping to pay less.
Disadvantages of Floating Interest Rate for Business Loan:
- 1. Unpredictable EMIs:
- With floating interest rate, the amount of EMI depends on the market fluctuations and changes from month to month. So sometimes the businessmen have to pay double or triple amount of EMI he or she paid a month before. This way the businessmen spend a lot of unnecessary funds every now and then. This EMI amount can't be predicted by anyone as the market changes from time to time. This can shake the businessmen's financial planning every month.
- 2. Not suitable for fixed income businessmen:
- As mentioned above, the nature of EMI amounts remains unpredictable in floating interest rate. Thus it is not suitable for those with a fixed income and a fixed monthly budget. An increase in the market rate can lead for such businessmen to flush down more than half of their monthly income. This can send them in financial jeopardy. If they fail to pay their EMI due to this unpredictability, banks charge them with late a fee which is just another financial setback.
To get a business loan with easy terms, one needs to have a strong credit score. The credit score is calculated on the basis of loan borrower's earlier financial activities. It is basically a numeric account of loan borrower's financial profile. The banks and NBFCs consider 750 as ideal credit score. But some banks and NBFCs offer business loan for credit score as low as 700, with negotiation.
Business loan amount
The business loan amount which the businessmen will take also determines the interest rate on a business loan. The lower the amount, the slightly higher the interest rate is observed. With amount fluctuations, interest rate on business loan also changes.
Following is a list of business loan interest rates offered by various banks and NBFCs in India:
|HDFC Bank Ltd.
||ICICI Bank Ltd.
|Kotak Mahindra Bank
||Edelweiss Retail Finance Limited18.25% onwards
|IndusInd Bank Ltd.
||18% to onwards
||Axis Bank Ltd.14.25% onwards
|Bajaj Finance Ltd.
||IntelleCash Microfinance Pvt. Ltd.
|Capital First Ltd.
||IIFL (India Infoline Finance Ltd.) 18% onwards
|Magma Fincorp Ltd.
|Tata Capital Financial Services Ltd.
||NeoGrowth Credit Pvt. Ltd.
|Ratnakar Bank Ltd.
||Standard Chartered Bank
|Aditya Birla Finance Ltd.
||Shriram City Union Finance Ltd.
|Equitas Small Bank
|IDFC Bank Ltd.
||Fullerton India Credit Co. Ltd.
|HDB Financial Services Ltd.
Business Loan In Mumbai
Mumbai with a population over a million is the finance capital of India. Mumbai is host to almost all types of industries. Be it banking, finance, IT, entertainment industry, food and cutlery, wedding planning, medicine and hospitals, transport, construction etc.
Business Loan Interest Rate
Business loan is taken by businessmen or entrepreneurs to meet with their business related needs. Business loan is an unsecured type of loan and the funds from this loan are used for business purposes only.
Small Business Loan
Small businesses in India are considered as the lifeline of the business industry.There are many micro, small and medium level businesses working towards making profit in India.To make huge conglomerate one has to start by taking small footsteps.