While partnering with other businesses can give you lucrative returns, you may consider expanding your venture on your own to improve your profits and retain control over decision making. In such a scenario you will need financial assistance to expand your business and make the most of rising demand, brand awareness and customer engagement that you have established.
At such times it is tempting to consider selling highly liquid investments such as your shares to raise the necessary amount. But despite your urgent requirement, hold off on liquidating your shares. Keep your investment intact, earn returns through shares and instead pledge them as security in exchange for a loan. Here are all the reasons why this loan a loan against shares is ideal for business expansion.
Large corpus of funds without losing out on investment income
When you take a loan against shares you can gain ample funding up to Rs.10 crore depending on the value of the securities you hold. The best part is that while your shares are pledged as security, you still own them and they continue to accrue returns. You just can’t redeem them until you have repaid the loan. With such a high amount you can fund all your needs be it constructing a warehouse to store inventory, hiring skilled workforce, buying equipment, installing software and more. Additionally, this loan carries a nominal rate of interest as it is a secured loan.
Concise and simple procedures that don’t take up your business time
A loan against shares does not have stringent criteria like a lot of other loans. In fact, typically you only have to be over the age of 21, an Indian citizen and hold shares worth at least Rs.10 lakh. So, you need not worry about matching a long list of criteria and gathering an exhaustive list of documents to prove the same. Since applying is simple, you can focus your energy on expansion plans and on ensuring that your existing setup is running smoothly.
Extra benefits make borrowing and repayment easy
A loan against shares comes with the option of prepaying and foreclosing your loan account at no extra charge. This Loan Against Shares gives you the option to apply online and also manage your loan online. As a result it is easy for you to track your loan, make repayments and view statements. You can do so anytime, anywhere, while you’re meeting with your contractor or are discussing the improved floor plan with your interior designer. This loan is easy to repay as well. Apart from NEFT, RTGS and cheque payments, you can also sell a portion of the shares that you have pledged as collateral, and you have a total of 12 months to repay the amount conveniently.
Access funds as and when you need them
Expanding your business is a tricky process where you’re likely to have to pay third-party vendors and service providers in instalments. When you take a Loan Against Shares from popular lenders, you can cater to unexpected and periodic requirements with ease. You can take this finance as a Flexi Loan to do so. Here you can borrow from the total a mount that you qualify for in parts, as and when you wish to.
You only pay interest on what you use and not the entire sanction. Moreover, you can choose to pay interest-only EMIs and repay the principal once the tenor is complete. This is ideal for business expansion as you can manage your cashflow through the tenor and make the principal repayment once your income has increased post business expansion.
When you take this loan don’t forget to check the loan against shares interest rate before you apply.