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How To Responsibly Pay Off a Small Business Loan

By Finserv MARKETS - Aug 28,2019
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Responsibly Pay Off a Small Business Loan

A loan can often make a world of a difference to a small business. A business loan can allow you to buy or update your machinery, grow your marketing networks or it can simply help you make ends meet and pay your employees.

Small business loans can be availed for short-term goals, long-term goals or even for intermediate terms when you require capital to fulfill an urgent requirement for your business.

In today’s fast-paced world, availing a small business loan has become a hassle-free process. Bajaj Finserv Business Loan, available on Finserv MARKETS, approve unsecured loans for up to Rs. 30 Lakh for businesses in under 24 hours through submission of only two documents.

Since these loans can often prove to be life-savers for your business, it is essential for you to repay the loan responsibly. Failing to repay a small business loan can often spell disaster for you in the long-term as it can lock you out of any future capital infusions, hurt your personal and business’ credit rating or even bring disrepute to your business.

Ensure a responsible loan repayment schedule by following the tips below:

  1. While availing a loan, be absolutely thorough with the terms being proposed by your lender. Ensure there is no ambiguity regarding repayment terms, interest rates, repayment schedule, etc. Ask your lender to clarify specific details that you are unable to comprehend.
  2. Maintain communication with your lender at all times. If you feel you may miss a payment owing to a lack of funds, intimate your lender at once. They may consider a postponement of your payment, or may offer you refinancing options that could prove valuable to you at a time when your business is not flourishing as well as you could want it to.

Responsibly Pay Off a Small Business Loan

  1. Construct a budget even before you avail a loan, so as to ensure that no unnecessary expenses are carried out through the small business loan which is often a very valuable resource. With Bajaj Finserv Business Loan, available on Finserv MARKETS, you get access to a flexi-loan facility which allows you to withdraw only what you need and pay only interest as Equated Monthly Installments (EMIs). This particular lender provides a small business with the option to repay funds as per the business’ cash flow at nil prepayment charges. Budgeting your expenses in advance will allow you to ensure minimal unnecessary expenditure.
  1. Running a small business is a full-time job and encompasses a host of responsibilities and tasks for you which may push your repayment schedule to the back of your mind.
    Setting up an ‘Autopay’ option with your bank is a good way to ensure that you do not forget to make your monthly payments. ‘Autopay’ ensures that the payment due to the lender is deducted without you having to manually process it each month. Your regularity with your small 
    business loan repayments will boost your credit score to a great extent, and can significantly aid your efforts in securing another loan in the future.
  1. If you avail your small business loan with fluctuating interest rates, or even at a high-interest rate, you could consider refinancing your loan. With a host of refinancing options available for your small business loan, you could secure better interests and loan terms over a period of time. Refinancing will ensure that you are repaying your loans while also having enough working capital to continue running your business the way you wish to.

A well-usinesstructured small business loan can allow you to grow your business by leaps and bounds. You can use it to increase your business’ cash flow; increase office space or even renovate it; purchase, lease or repair machinery and equipment; upgrade your business processes with the latest technology available in the market; stock up on inventory; hire more employees; purchase raw materials for bulk orders; expand operations to a different geographical area and scale up your operations significantly. With the rise of multiple Non-Banking Financial Companies (NBFCs) in India, availing a small business loan has become easier than ever. Bajaj Finserv business loans’ interest rates start for as low as 18%, and can be availed without providing any collateral which makes the process of availing the loan that much faster since no time is spent on assessing the value of the collateral offered.

With all the value that a small business loan brings, it becomes even more imperative to ensure that your credit score is not affected by an ability to repay your loan; which will hinder your future efforts at availing requisite capital from the market.

Get to know more about difference between large and MSME Loan. You can also read about business loan schemes for women.

Finserv MARKETS, from the house of Bajaj Finserv, is an exclusive online supermarket for all your personal and financial needs. We understand that every individual is different and thus when you plan to achieve your life goals or shop for the gadget of your dreams, we believe in helping you Make it Happen in a few simple clicks. Simple and fast loan application processes, seamless, hassle-free claim-settlements, no cost EMIs, 4 hours product delivery and numerous other benefits. Loans, Insurance, Investment and an exclusive EMI store, all under one roof – anytime, anywhere!

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Bajaj Finserv Direct Limited ("BFDL"), erstwhile Bajaj Financial Holdings Limited is a registered corporate agent of Bajaj Allianz Life Insurance Company Limited and Bajaj Allianz General Insurance Company Limited under the IRDAI composite registration number CA0551 valid till 10-Apr-2021. BFDL also renders services to Bajaj Finance Limited (‘BFL’) and Bajaj Housing Finance Limited (‘BHFL’) (referred hereinafter as ‘Lending Partner’) in sourcing of customers, providing preliminary credit support activities, fulfilment services and post-acquisition customer services related to lending business. Registered Office: Bajaj Auto Limited Complex, Mumbai – Pune Road, Akurdi, Pune – 411 035 CIN: U65923PN2014PLC150522