Know EMI Options Available for Business Loan
It is a desire of every business owner to expand or promote his business which demands urgent funds to grow. Approaching banking and non-banking financial institutions for a credit facility is an advisable option. Obtaining a credit facility from the lending institution is alternatively termed as business loans. There are many types of business finance like working capital loan which is both secured and unsecured in nature, start up loans, term loans and overdrafts. You can explore these options further to know the one that fits your requirements at the best. Irrespective of the type of business finance you choose, it has to be repaid in equated monthly instalments. Many lending institutions today offer different repayment options to help you know the amount that has to be paid every month.
Income of the business owner is never stable so, it is important to focus on the monthly payout of the commercial loan. Knowing these flexible repayment options for the business finance will keep your cash flows in the comfort zone. On exploring these EMI options for a business loan, you can customise your repayments in accordance with the varying cash flows of the business.
Set up flex plan
As evident by name, this repayment option allows you to set up the payment amount and allows you to increase EMIs as your annual income rises over a period. Business organisations are run with the motive of increasing their profits over years. You can easily afford higher EMIs with the raise in your income. Tend to choose this plan if you expect higher income in future for your business.
Step down flex plan
This plans just stands opposite to the plan stated above. In this plan, you can go for higher monthly payments for a year and reduce it later. Reducing the payments doesn’t mean that your business is going into losses in future. This plan can be opted to make a right use of the available cash flows. If you have good disposal income at your end, this repayment plan suits the best for a business loan so that you will a good deal of interest on the loan by repaying it faster.
Bullet flex plan
If you don’t want to manage your loan payments that should re-paid every month, you can choose to go with this repayment plan for your commercial loan which allows you to make payments periodically. Your EMIs will be reduced on these periodical payments. This type of repayment option can be your choice to handle business finance if you expecting profits in the business quarterly.
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