NBFC or bank – Which One is best to take a Business Loan for Kirana Store

There is a need to raise funds at various stages of conducting the business for a Kirana Store, sometimes even after completion of the initial expenditure to set up the store. In addition, a working capital fund is required to run the Kirana store and such requirements are met through business loans.

Ensuring availability of funds by yourself at all times can be a difficult task. Therefore, to balance your financial needs, various banking and NBFC institutions offer business loans. These help in reducing business loans, financial concerns of the business and the need for funds.

Business loan interest rates typically start at 14% per year. Apart from this, there are many factors that determine the interest rate by the lender. Parameters for interest such as business profile, business plan, credit score, loan funds, business stability and profit, other financial aspects, industry outlook and risk assessment are included.

Comparison of business loan interest rate for NBFC and Banks

Taking a loan is not a big deal. It is a big deal to repay the loan with interest. For this, the loan needs to be correct. The loan is correct when the interest rate applicable to the loan is as per the customer. Here is a detailed list to compare the latest interest rates, processing fees and loan amount of business loans offered by popular financial institutions. With this list, Kirana stores will be able to decide from where it would be appropriate to take a business loan.

Factors Affecting Business Loan Interest Rates

There are 4 factors that work in determining the interest rates of a business loan bank/NBFC in India, for a business loan for Kirana Store, which are given below:

• Credit history and CIBIL records: The credit score of the business is important for sanctioning a loan. If you pay the loan properly, you can get a loan from any bank or NBFC in India and at reasonable rates. All banks review the credit score of the applicant before granting a loan with a minimum interest rate for public or NBFC business loans.
• Business Hours: Business type does not matter. Rather it should be in operation for more than 2 years. The older the business, the greater the chances of getting loan facility.
• Business Turnover: If the annual turnover of the business is more than Rs 10 lakh, then the lender will assume that there will be no default in the loan repayment of the borrower.
• Security: Sometimes a banker or a NBFC has to pledge the property as a security for loan approval to the loan seeker. However, after the loan is over, the customer gets it back. If the loan is not repaid, the loan is repaid by auctioning the mortgage.

The differences between with the NBFC and the bank gives a better clarity for the Kirana Store owners to apply for a business loan. The major factor being the rate of interest makes the owners confident about choosing the financial institution.also visit best bank for receiving Google AdSense payment