The inclusion of NBFCs (Non-Banking Financial Companies) in the Indian financial sector has significantly improved the business financing landscape. One of the primary reasons for the tremendous growth of the NBFC sector is the ability to meet the diverse financial requirements of those excluded by banks. In addition, their innovative financial products and less stringent application and approval procedures have contributed to their increased popularity among borrowers. This blog post discusses four reasons to consider NBFCs when planning to get a business loan.
1. Minimal Documentation
Unlike banks, NBFCs can garner the attention of most borrowers because of their minimal paperwork and documentation requirements. When trying to get a business loan from a bank, you have to go through stringent documentation and paperwork requirements. If you fail to furnish all the required documents, the bank may turn down your loan application. In contrast, it is usually not the case with NBFCs, thanks to the minimal paperwork involved.
2. Faster Loan Sanctions
Strict documentation and other loan processing norms make availing business loans from banks a lengthy process. On the other hand, when applying for a loan from an NBFC, the loan disbursement turnaround time is short because of the simple eligibility criteria and fast processing. Generally, most NBFcs process loan applications within 72 hours of applying and immediately disburse the money to your bank account.
3. Easy on Eligibility Norms
Banks have to follow a stringent verification procedure for loan eligibility criteria, whereas NBFCs follow a relaxed approach. For example, a bank may refuse a loan application if your credit score is lower than 750. Still, an NBFC will approve your application, maybe with a slightly higher interest rate. Additionally, getting an unsecured business loan from NBFCs is much easier as compared to banks.
4. Varied Interest Rates
One of the primary concerns of loan seekers is the high interest rate. Banks are regulated by the Reserve Bank of India and have to follow strict regulations while deciding the interest rate for a particular loan application. On the other hand, NBFCs calculate the interest based on the prime lending rate (PLR), which the central bank does not regulate. This gives business loan companies greater flexibility and the ability to offer competitive interest rates to borrowers.
NBFCs such as KreditBee play a vital role in the success of small and medium businesses by providing them with quick and convenient business loans. For example, suppose you are looking for a business loan. In that case, you can check your eligibility and download our loan app to apply for an online business loan with minimal documentation. To get more information on how you can apply for an online business loan, email us at [email protected]