Benefits of Term Loan
What are all the Benefits of Term Loan ?
Business need finance for starting up, expansion and modernization of business. Let’s see why any business need finance. For a new business, you need to buy assets and fresh inventory. Initial cost is also there for setting up business. For existing business for expansion like opening up branch and adding new line of business. Term Loan is one of the best Source of funds for you business. What are all the Benefits of Term Loan ?
Finance through capital infusion or to borrow money from lenders
Business also need finance for loss making business for bringing back to normal situation. Now how to access finance? You can access finance internally or externally. Internal finance is to use retained earnings. New business may have less or no retained earnings. Next option is external finance. You raise finance through capital infusion or to borrow money from lenders.
Boost cash flow
Taking loan from lenders always have more advantage than raising capital. Term Loan allow you to spread out the cost throughout loan tenure. This loan allow you to boost cash flow, hiring up new team, buy bulk inventory, buy fixed assets and merge debts. Lets’ discuss the benefits of Term loan.
Improves Operational Cash flowÂ
Capital is a scare resource and investing capital in single project of a business. It limits the capital availability to other business projects. Term loan is accessible and conveniently availed. You get a Term Loan and diversify the investment in various projects. Cash inflows from all projects may not be at same time. Thus, cash inflows from various projects help you to improve operational cash flow at all times.
InterestÂ
Interest on Term Loan is tax-deductible. Whereas dividend for equity and preference shares are paid out of profit after tax. Term Loan is cheapest source of finance compared to other source of finance. You can fix the interest on this loan with negotiation with bank. Good credit score, strong financials(existing business) or viable business plan (new business) helps you to get Loans at low interest rate.
Speed of processing
Time is money. All business need money quickly. With the online loan application and loan processing, you get the money disbursed fast. We at S & P Bank Loan Services & Loan consultants help you to get the loan within short span of time. You get the money early, you will also have a peace of mind towards finance arrangement.
Preserves ownership
Term Loan comes under debt-financing. It does not involve selling part of equity for procuring funds. You can hold 100% ownership and you can run the business as you wish.
Lender does not have right to vote. Lenders does not entitle to ownership like equity and preference shareholders. Lenders only demand principal amount with interest.
Minimize Investor Interference:
Seeking investor investment is one of the common ways to raise money. This is a way for control dilution and dividing ownership of the business. With term loans, you can access huge finance. You can also retain ownership and control of the business.
Improve Credit:
Term loan is a loan which allows you to pay the loan amount in periodic installments. You pay the installments due in time and it improves your credit score. Having a good credit score always helps you at all time to take any type of loans from creditors. Thus, this loans are effective way to build creditworthiness of business.
Flexible Terms:
There is no maximum amount for term loan generally. You can start borrowing from Rs. 10,000 to any higher loan amount. This allows small and big business man to apply for term loans based on their need. In the same manner, you can also fix the loan tenures as you need. Based on business need, lenders provide holiday period/bullet repayments.
EMI / Monthly installment at the sanction of the loan
Lenders fix the EMI / Monthly installment at the sanction of the loan. Lenders also fix all cost related to term loan at sanction stage only. This loan does not allow you to spend any unpredictable cost in future. Meanwhile, You can fix term loan cost on monthly budgets at beginning of the year.
Contact the Best Term Loan Consultants
Best loan consultants in S & P Bank Loan Services provide you full support from start to end of Term loan process. In Fact, We provide dedicated staff to follow up with you through process and after loan support. Of course, We support you with best loan products which suits your business need. Feel free to contact us for all types of loan needs.
