What is Trade? And what is Trade Finance? Sounds simple? Yes, they do! But the concept of trade, known to humankind, dates back to almost as far as 3000 BC in Indus Valley Civilization. Trade Finance, on the other hand, is a pretty new concept which started in the early 1900s. In a survey conducted by an eminent financial daily, seven out of every ten business owner answered correctly what ‘trade’ actually means. But it was quite shocking that only 2 out of those knew what ‘trade finance’ was. For a business in times like today when NPAs (Non-Performing Assets) is crippling economies world over, and there is a liquidity crunch in the market, finance has become the sole focus area for small businesses.
Trade finance has a very broad coverage area, to say the least, ranging from domestic and international trade, importers, exporters, banks, and NBFCs (Non-Banking Finance Companies), to very familiar and known concepts of buyers and sellers. For the sake of simplicity and keeping in mind the idea of this article, let’s focus on traders (domestic) and banks or other financial institutions.
Let’s find out how traders can finance their trade to keep businesses up and running smoothly. Mostly small manufacturers, traders, and shopkeepers need continuous flowing cash for their day-to-day business activities. Some of the other heads for which they need finances are:
- Increasing working capital
- Expansion of Business
- Investing in Diversification
- Renovating their place of trade (if they are not trading their goods online entirely)
- Construction of Warehouses
- Buying new machinery
- Buying technologically advanced Equipment
So, if you are a shopkeeper or a trader or if you are thinking of venturing into a small business and are struggling for finances, read on to find out how to get business loans which are so popular with small businesses. NBFCs, in the recent past, have been very popular when it comes to a business loan for shopkeepers.
Why consider NBFCs over Banks for Online Small Business Loans?
- Banks
- NBFCs
- Rigid framework
- Exhausting process
- No unsecured loans for small business
- High-interest rates
- Huge documentation
- Easy rules and regulations
- Quick disbursal
- Unsecured loans available
- Comparatively lower interest rates
- Minimal documentation
How are NBFCs generating more powerful Customer Base?
The entire business loan application and agreement process are online. You can sit anywhere and anytime and be able to sign your business loan agreement while taking an NBFC business loan.
All the loan products are designed, keeping in mind the requirements of small and medium business owners. The loans can be paid off in easy monthly instalments ranging from 12-24 months.
Anyone owning a business of his own can apply for loans in an NBFC. Be it a machinery loan, a loan for expanding your business, or to raise funds for buying raw materials. NBFCs cover them all!
No Prepayment charges apply to loan applicants after the payment of a certain number of EMIs.
Online Business Loan Apply Process
Since the entire process is online, traders or retailers are not required to visit any office for a face to face meeting. All one is required to do is go to the respective websites of the NBFC they have researched thoroughly and from whom they want to avail loans from and simply apply for the loan. Hence, traders can focus on their business while the NBFC takes care of their funding.
The next thing one is required to do is upload documents. And when we say documents, don’t get scared! There are very few requirements, namely PAN Card, Aadhar Card, and IT Returns (last two years).
And you are done! Once the documents are thoroughly looked into by NBFC representatives, the business loan disbursal takes place in just a few working days. Yes, you read that, right! Isn’t it amazing?
Were you expecting a long list of Do’s and Don’ts?? I guess you feel relieved. The entire process is so easy and less time consuming; small business owners prefer NBFCs more than banks because of the obvious reasons. Also, NBFCs have become one of the most significant factors for the economic growth of a country. So, keep your money worries at bay and use the approved loans to prosper every day.
