If sales are towards the lower side, and you are facing a hard time paying your bills you need to protect your savings fund.
This can be done if you can limit cash flow out of your business:
- Reduce discretionary spending (non-essential activities)
- Lower capital cost (postpone the purchase of equipment)
- Lower the rent (landlords can negotiate for lower rent in economic downturns)
- Temporarily cut salaries and working hours
- Buy supplies in bulk
However, if you still find it difficult to save much, there are other options to finance business expenses. Low-interest rate options like instant personal loans can be easily applied online, without the need for any collateral. Take a look at such options to avoid financial strains.
The Advantage of Credit Cards
Consider a credit card to fund immediate expenses along with plenty of benefits later on. Along with interest-free cash withdrawals and low FX mark-up fees, there are many other benefits to consider:
- Low-interest rates
- Redemption of reward points with zero fees
- Cashback and frequent flier miles. Many retailers tie-up with banks to offer special discounts to customers
- Travel insurance, lounge access in domestic and international airports, and accident cover privileges can help you as a business traveller
Personal Loans for Easy Payment of Dues
If you pay your credit card bills and other EMIs on time, chances are you will have a good credit score. In that case, you can qualify for the lowest interest rate personal loans. However, before you apply consider the impact of your monthly EMIs on your expenses. You can calculate your EMI using a personal loan calculator.
The loan amount for a personal loan can go up to ₹40 lakhs, which can be substantial for your strategic expenses. Moreover, you don’t have to submit extensive documents or collateral to get the loan amount.
Enterprise Loan Designed Especially for MSMEs
Another collateral-free loan with minimal document requirements is the enterprise loan. Loans with the lowest interest rates have been specifically designed to suit the requirements of small-scale businesses in the retail, wholesale trade, and manufacturing sector. If you belong to the dairy sector or agri-allied businesses, an enterprise loan could be good for you as well.
Loan against Property
For the highest loan amounts, consider opting for a loan against property (LAP). Such products have many advantages such as:
- No spending restraints
- Can continue to use the property even after the loan is availed
- Lower interest rates than some other sources of financing
- Covers a range of properties like godowns, manufacturing units, and more
A LAP can not only preserve savings but also offers low-cost EMIs with repayment tenures as long as 20 years. An existing customer of a bank can choose a top-up loan.
Investment-Linked Insurance Plans
ULIP products can provide the twin benefit of insurance coverage as well as market-linked returns. In case of financial emergencies, you can withdraw a partial amount from your funds, provided that you have completed a certain amount of the policy period.
You have the opportunity to accumulate wealth for future business use by investment in various funds, based on your risk profile.
Whether you choose personal loans or LAPs, be sure to compare interest rates and tenors across different lenders. Applying for too much credit at one time can harm your credit score. So, it’s a good idea to be sure about your eligibility before applying.