Summary: The Business Loans are a good choice whether you wish to start a new business or to expand the existing business.

Description: Can Business Loan be Beneficial If you are Start-up? It is true that a lot of people don’t think that a business loan is a good idea! But, it doesn’t mean that good reasons do not exist. Just read the success story of Reliance, How Dhirajlal "Dhirubhai" Hirachand Ambani self-funded the company with a Small Business Loan! If you have a powerful business idea that can take the world by storm, then the business loan is no harm. All you have to do is determine the cost of loan against revenue it can generate. If the returns outweigh the debt, go for a business loan. Make sure you the math right. Don’t overestimate your profits out of over-enthusiasm. Your decision should be based on hard numbers, not your gut-feeling! Here are some reasons to apply for a business loan –

1. Debt is good if you don’t want to give up on the equity position:
Having investors with equity shares is like having multiple bosses. It is a bad option if you don’t want to sell the part of your business. While with a business loan you don’t need to give up any part of your company. One of the painless ways to avail a business loan is by means of Peer to Peer Lending Platforms. These online lending platforms will match you with the trustworthy online lenders, who keeps a no say in how you wish to run your business.

2. Unsecured loan i.e. Free of Collateral or any other guarantee is the best choice:
A collateral attached loan means you are borrowing against your asset. In simple words, it means you agree to pay back the loan with your own business or personal assets in case the business folds. It could be a risky business, especially for start-ups. But, if you can get a Business Loan free of collateral then, surely it a good option. The unsecured loans, which are based on the borrower’s creditworthiness are provided by various financial companies and P2P lending platforms.

3. Plan a growth plan with the loan money: As an entrepreneur, you must know where your money is going. Therefore, before you get the funding you must have a projected growth plan of revenue you are going to generate with the loan money.

4. Peer to Peer lending platforms can be a good option to crowdsource the funds you need:
A loan for a business is more about working with the cash flow. Currently, Peer to Peer Lending Platforms is proving out to be boon for entrepreneurs to crowdsource the funds they need. The loan interest rates, amount and loan tenure for P2P business loans are generally kept in favor of start-ups. If you apply for a Small Business Funding, then generally the interest rate will be in the middle of 12% to 36%. Make sure to bargain the low competitive rates with P2P lending platforms. Don’t go a business loan with interest rates too high. Since a small business organization cannot pay such a large sum.

Where to apply for a business loan?

The financial service sector has evolved rapidly in past few years. Previously banks were the only option for start-ups and entrepreneurs. However, today with the booming crowd funding platforms, angel investors and micro finance investors, start-ups have a plethora of options to avail financing for business.

Author's Bio: 

Faircent is promising P2P lending platform offering lenders above the market returns on the investment, while borrowers can enjoy low-interest rate loans pooled from various lenders altogether.