Pros and Cons of Availing a Business Loan for Your Startup
Startup loans are the best financing options for entrepreneurs who want to acquire funds for their startups. Such loans help you establish your business with a strong foundation, giving it more potential to grow in the future. However, there are pros and cons to availing of a business loan for your startup. Let's weigh them.
Pros:
You get easy money to set up your business and conveniently afford the initial costs of inventory, equipment, workplace, staff, and others.
When you have enough money to invest in your business, you don't need to give an equity share in return for investors' money.
When you have a loan to start your business, you don’t need to spend money from your savings. Since startup loans are unsecured, you don’t need to put any asset as collateral as well.
Regular EMI payments can help you build your credit score, which makes more money available to you as loans in the future.
Cons:
Business loan eligibility conditions may be hard to fulfil for some borrowers. However, NBFCs like Fullerton India have simple eligibility conditions that anyone can easily fulfil.
Some borrowers may be worried about EMI payments. However, using a business loan EMI calculator, you can choose a loan term with an EMI amount that fits your monthly budget.
Missing EMI payments may reduce your credit score and lead to hefty late-payment penalties. You can avoid them by staying consistent with your loan EMIs.
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