Since the announcement of the Startup India Campaign in 2015, India has seen an increase in the number of micro, small, and medium enterprises (MSMEs). This campaign primarily aims at providing institutional funding to startups.
The rise in the number of startups is expected to boost new job opportunities. This, in turn, would help in growing the domestic economy.
Financial institutions provide business loans to eligible startups. Here are some eligibility criteria:
Having understood the various aspects of these loans, it is recommended you calculate the repayment method. Generally, the loan is repaid in Equated Monthly Installments (EMIs). These are fixed monthly sums you need to pay during the tenure to repay the complete borrowed amount.
The EMI comprises both the principal and accrued interest thereon. A business loan calculator uses the loan amount, interest rate, and tenure to determine the EMI.
Formula to calculate EMI
E = P * r *(1+r) ^ n / ((1+r) ^ n-1)
E = EMI
P = Principal
R = Rate of interest
N = Loan tenure
Several non-banking financial companies (NBFCs) offer these types of loans. It is recommended you check the different options and compare these to make an informed decision.
Some of the things to check and compare include the interest rate, processing charges, documentation fees, prepayment penalty, and other expenses. Additionally, compare the tenure and the loan amount offered by different institutions based on your eligibility criteria.
Having access to early-stage funds is crucial for the growth and sustainability of any startup. Financial institutions understand this need and provide beneficial funding options to help startups during their initial stage in the business cycle.