The difference between borrowing from a friend and borrowing from a financial institution is that you can pay as per your convenience with the former. Flexi business loans are somewhat similar. Yes, it has a scheduled repayment structure like any other loan. However, you do have some flexibility based on your convenience.
Flexi Business Loan
As the name suggests, these loans can be used per the borrower’s flexibility and need. They are pretty new to the market and popular as a means to meet an immediate business requirement. The lender will consider your business loan eligibility, and repayment terms will be agreed upon as per your business loan EMI schedule. You can use a flexi-business loan to purchase equipment, business expansion, employee training, handling a sudden order, etc.
Businesses that need funding for the following purpose can be provided with Flexi Business Loan:
Features of Flexi Business Loan
- Loan amount – Although the maximum limit may vary from lender to lender, it could be Rs. 20 lakhs to Rs. 30 lakhs depending on your eligibility. Your business loan eligibility will depend on factors like income flow, credit score, and tenure.
- Truly flexible – It permits you to withdraw and prepay loan amounts at your convenience. For example, if you are granted a Rs. 10 lakhs loan and you immediately need Rs. 3 lakhs for a business emergency, you can do it. This just gets adjusted with the approved loan amount.
- Interest calculation – The flexi business loan interest rates calculation is made only on the withdrawn amount, which decreases the total borrowing cost of the . Referring to the above example, you need to pay interest on Rs. 3 lakhs and not on Rs. 10 lakhs.
- Faster approval – As the documentation process is simple, the application for the loan gets approved faster. You can withdraw the loan amount as quickly as within a couple of hours.
- Business loan EMI option – Flexi business loan EMI payment can be generally made in one of the two following ways:
- Fixed EMI option where the This plan suits you best if you have a consistent income. and the principal amount remains unchanged during the loan tenure. It must be paid on a fixed date every month.
- The structured EMI option is flexible and can be customized for your convenience, where initially, you pay less with the EMI amount increasing successively. This plan suits you when your income is supposed to increase at regular intervals. You can decide on your suitable EMI amount after calculating it in a business loan EMI calculator.
Flexi business loans get rid of the rigidity of traditional loan products. With it, you can repay the business loan flexibly and concentrate on the effective utilization of the fund now.