Finance is the lifeline around which all the business activities revolve. Whether you have to start a new business project or expand an existing one, business finance is equally important in both the cases. It hardly happens that business entrepreneurs have all the requisite resources at their disposal. At one point of time or the other, they have to take recourse to business finance.
There are various sources from where you can get business finance. Private companies can resort to capital from their directors; public companies can gather money from public issue of shares and debentures; sole proprietors can take business loans from banks or private lenders and so on.
Every businessman plans and makes proper allocations in the budget. But, still deviations are bound to erupt. Any deficit in business funds can be supplemented by taking
business loans. The business requirements do not always arise as planned for. Urgent and unforeseen expenses require immediate attention. Immediate funds can be arranged by taking unsecured business loans. Unsecured business loans are short term loans designed to help you in times of distress. These loans are quick to get and, thus, fulfil your business requirements effectively.
Another type of business loan is secured business loan. This loan requires collateral that may be any valuable asset. Generally, it is your business premises, land and buildings, plant and machinery, etc. The loan amount depends on the value of the security. The interest rate is low as there is an assurance in favour of lender in the form of collateral. This makes lender quite satisfied as to the repayment of the loan amount. However, there is an inherent risk of repossession in case of secured business loans. If you fail to repay the loan amount, your collateral could be repossessed by the lender. But, a good financial planning will help you eliminate this risk altogether.
