There are many small business owners who are clueless on the procedure of applying for a business loan under government scheme. As the presence of large number of schemes in the market makes the process of searching for the appropriate scheme difficult, most business owners take help of professional advisors for getting the loan amount under their affordable repayment capacity. In this regard, it is important to note that the Small Business Administration (SBA) and other such organizations cannot help you in your search. These organizations only offer consultancy services. Therefore, make sure that you do not make any advance payment while applying for the loan amount under the government scheme.
There are mainly two types of business loans available in the market; secured and unsecured. For availing the loan scheme, you have to pledge your property or assets as security. It does not mean that you can skip this vital requirement of the government scheme. Besides pledging your assets for availing the loan amount, you also have to convince the lender about your stable income and expenditure. If the lender believes your details, he may overlook the risk involved in giving you the loan amount.
The only way to secure a business loan under govt. schemes is by making use of your business assets. However, the repayment schedule of the loan amount depends on the type of business you have proposed. For instance, a mortgage loan is given on a long term basis and you may have to repay the loan amount over a long period of time.
You may also get a concession loan under the same scheme. This kind of loan gives you a low interest rate and small monthly installments. This will be an ideal option for your business if you are planning to expand your business. On the other hand, if you have to make major purchases for running your business, you may get a credit facility.
The maximum amount of loan available under business loan under govt. schemes is about $75000. You need to repay the entire loan amount as quickly as possible. In case your business fails to generate the required profit, the loan amount too will not be returnable. If you are not able to manage the repayments regularly, you will lose the privileges of the loan. So, it is very important to repay the loan on or before the due date.
Businesses having low-income too can go for small business loans. This is possible because the money comes from the Consolidated Funds Loans Program of the Government of India. The only condition is that your business should be having a profit margin. The condition for the business to earn a profit is not very rigid, provided you have sound financial management skills. A convincing business plan will help you win the loan. In case you have any doubts, you can check with your bank or take professional advice from your financial advisor.
For availing small business loans, you need to make sure you repay the loan on or before the specified time period. Repayment schedule varies from lender to lender. You can find more information regarding the repaying schedule of the loan on the . . . . . . internet. There are also plenty of online lenders who offer loans at very reasonable interest rates.
The repayment schedules of small business loans are based on your net profits after deduction of various other expenses. There are no obligations when you take a small business loan. The borrower is responsible for repaying the loan amount. However, if you find yourself unable to meet the repayment on time, you may lose the privilege of the loan.