It is no secret that the two most popular forms of funding preferred by business owners are loans and credit cards. Out of the two, the option most suited for you will vary according to your credit needs, end-purpose, credit score, and more such factors.<\/p>\n\n\n\n
Credit cards andsmall business loans are available at affordable rates to boost small enterprises in India. You can quickly qualify for one of these options and fulfil your monetary needs for expansion of business or repaying old debts. Read further to learn about these two financing options in detail.<\/p>\n\n\n\n
Business loans<\/a> are the best option if you want to finance your business in a planned and long-term method. Once you get approved for a business finance option, you will receive a lump sum amount, and you can use it to:<\/p>\n\n\n\n And anything relevant to your business needs.<\/p>\n\n\n\n To become eligible for business credit or loan, your company must be successfully operating for at least three years. Other factors that determine your business loan eligibility include your age, annual turnover, bank statements, etc.<\/p>\n\n\n\n Besides, the Indian government, banks and NBFCs also provide several SME loan schemes to uplift small enterprises. Under these, you can acquire a loan without surrendering any collateral.<\/p>\n\n\n\n Additional Read:<\/strong> How to Get a Small Business Loan from the Government<\/a><\/p>\n\n\n\n A business credit card is designed for business use and is a good way to keep your individual and business finances separate. Qualifying for credit cards is easy, and anyone can obtain a credit card for their business, with a specific limit up to which they can borrow.<\/p>\n\n\n\n A loan functions on instalment debt whereas a credit card works on revolving debt. Suppose you take a loan for Rs. 30,00,000 at an interest rate of 9% for 20 years; then you will have to pay a monthly EMI of Rs. 26,992 to repay the loan in the given tenure. You can use an online business loan EMI calculator<\/a> to accurately check the EMI payment.<\/p>\n\n\n\n While a loan is more suitable for well-planned expenses and long-term business investments, a credit card can be useful for emergency cash requirements and frequent withdrawals. You can also earn rewards or cashback on credit card usage, but this option is preferred mostly by people who are sole proprietors of their business.<\/p>\n\n\n\n Additional Read:<\/strong> Top 7 Ways to Build Business Credit<\/a><\/p>\n\n\n\n\n
Credit cards as business finance<\/strong><\/h2>\n\n\n\n
Loan or credit card – which one should you choose?<\/strong><\/h2>\n\n\n\n
Conclusion<\/h3>\n\n\n\n