Why Choose Business Loans From NBFCs Over Banks?

Business loans provide a crucial means for entrepreneurs to secure financing to support their business operations and enable growth. Traditionally, banks have been the primary source of such funding, but non-banking financial companies (NBFCs) have emerged as a viable alternative. This blog aims to examine the reasons why NBFCs are an advantageous choice for securing business loans as opposed to relying solely on banks.

 

NBFCs have a streamlined application process that can often result in faster approval times and disbursement of funds. This is because they are not subject to the same regulatory requirements as banks and can, therefore, offer more flexible loan terms and faster turnaround times.

 

5 Reasons To Choose Business Loans From NBFCs Over Banks

 

NBFC company in Delhi have emerged as a popular alternative to traditional banks for small and medium-sized businesses seeking loans. This is due to several factors that make them an attractive option for entrepreneurs looking for financing options. Firstly, NBFCs are known for their flexible loan terms, which can be tailored to meet the specific needs of individual businesses.

 

We offer a wider variety of loan options, including specialised products that are designed to cater to specific industries or needs. Additionally, NBFCs have a streamlined application process that results in faster approval times and disbursal of funds.

 

We are not subject to the same regulatory requirements as banks, which means we can offer more flexible terms and quicker turnaround times. Moreover, NBFCs may have more lenient eligibility criteria, making it easier for newer businesses to access loans. We often consider factors beyond just credit scores, such as cash flow and revenue when evaluating loan applications.

 

1. Quick Approval and Disbursal

 

One of the significant advantages of NBFCs over banks is their faster loan approval and disbursal time. Banks generally take longer to process loans, as they have strict eligibility criteria and need to verify many documents. In contrast, NBFCs have more relaxed eligibility criteria and usually offer loans with fewer documents. Moreover, NBFCs disburse the loan amount more quickly, usually within a week, whereas banks may take weeks or even months.

 

2. Flexible Loan Terms

 

Another advantage of NBFCs over banks is the flexibility they offer in loan terms. Banks usually have strict loan terms, and borrowers must agree to them to receive the loan. In contrast, a finance company in Delhi offers more flexible loan terms, including customised repayment schedules, no prepayment penalty, and the option to choose between fixed and floating interest rates. This flexibility can help businesses manage their cash flow more effectively.

 

3. No Collateral Required

 

Collateral is an asset that borrowers pledge to the lender to secure the loan. Banks typically require collateral for business loans, which can be challenging for small businesses to provide. In contrast, many NBFCs offer unsecured loans, which do not require collateral. This can be a significant advantage for small businesses that may not have enough assets to pledge as collateral.

 

4. Personalized Services

 

NBFCs are known for their personalised services, which are often lacking in banks. They take the time to understand the borrower's business and its unique needs, offering customised solutions to meet those needs. Moreover, NBFCs often assign a dedicated relationship manager to each borrower, who can help them throughout the loan process and offer guidance when needed.

 

5. Higher Approval Rate

 

Finally, NBFCs have a higher approval rate for business loans compared to banks. Banks have strict eligibility criteria and may reject loan applications if they do not meet those criteria. In contrast, NBFCs have more relaxed eligibility criteria, and they are more likely to approve loans for small businesses with less than perfect credit scores or no credit history.

 

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While banks have traditionally been the go-to source for business loans, NBFCs offer several advantages that make them a better option for small and medium-sized businesses. With quick approval and disbursal times, flexible loan terms, personalised services, and a higher approval rate, NBFCs can help businesses grow and succeed. Give us a call today!