Most businesses require capital irrespective of their size. Working capital is needed for meeting day-to-day business expenses. Additionally, investments are required for the growth of your business.
However, you may not have the entire amount needed for smooth functioning of your business. Availing of a business loan is, therefore, beneficial. Here is how you should use your funds smartly for the growth of your business.
1. Make a business plan
Before you apply for seller financing, having a business plan in place will be beneficial. It will help lenders understand your vision and the opportunities that may be explored for your business growth. Moreover, it is important to stick to your plan and the budget to avoid overspending.
2. Keep track of business expenditure
With the availability of seller financed loans, it is possible that you may spend without considering the implications. However, you must avoid making unnecessary purchases and continue focusing on cutting down the expenditure. Keeping track of business expenses helps understand the spending pattern. If you fail to do this, you may quickly run out of funds and your business may suffer from financial difficulties.
3. Maintain a separate business account
It is recommended you maintain the Micro, Small, and Medium Enterprises or MSME loan amount in a separate bank account. By doing so, you will be able to segregate general business expenses and those made using the loan amount. This will help you analyze how the money is being used.
Benefits of business loans
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However, you may not have the entire amount needed for smooth functioning of your business. Availing of a business loan is, therefore, beneficial. Here is how you should use your funds smartly for the growth of your business.
1. Make a business plan
Before you apply for seller financing, having a business plan in place will be beneficial. It will help lenders understand your vision and the opportunities that may be explored for your business growth. Moreover, it is important to stick to your plan and the budget to avoid overspending.
2. Keep track of business expenditure
With the availability of seller financed loans, it is possible that you may spend without considering the implications. However, you must avoid making unnecessary purchases and continue focusing on cutting down the expenditure. Keeping track of business expenses helps understand the spending pattern. If you fail to do this, you may quickly run out of funds and your business may suffer from financial difficulties.
3. Maintain a separate business account
It is recommended you maintain the Micro, Small, and Medium Enterprises or MSME loan amount in a separate bank account. By doing so, you will be able to segregate general business expenses and those made using the loan amount. This will help you analyze how the money is being used.
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| (source: www.businesstoday.in) |
Benefits of business loans
- MSME loans are available for an amount ranging from INR 3 lakh to INR 75 lakh
- Business loans are often unsecured, thereby ensuring your personal assets are not at a risk in case of delay in repayments
- Business loans have flexible repayment tenures from 6 months to 36 months, which makes it easier for you to pay the monthly installments without facing financial difficulties
- Top-up facility is also offered by some lenders on an existing business loan
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