Leading banks, such as IDBI Bank provides cash credit facility for businesses to finance their day-to-day requirement. The finance can be utilized for the purchase of raw materials, stores, fuel, for payment of wages for labor, power charges, for storing goods till they are sold out & for financing the sales by way of sundry debtors/receivables. Cash Credit facility is granted to companies to bridge the working capital gap, by way of a running account. The withdrawals are regulated and the withdrawal limit is arrived at based on the structure of current assets and liability.
Cash Credit (CC) is granted against hypothecation of stock and assets such as raw materials, work-in-process, finished goods and stock-in-trade, including stores and spares.
1. This loan is given to meet the working capital requirements of a business. 2. It is given against a collateral security. 3. Interest is generally charged only on the amount of loan taken by the customer and not on the amount of credit sanctioned. 4. This is a short-term loan with specified monthly/quarterly repayment structure as decided by the lender. 5. The applicant is allowed to withdraw the funds made available to him to meet the day to day working capital requirement by way of a running account. 6. A cheque book is issued in the name of the company and he can withdraw funds as per requirement 7. The applicant has the option to repay the loan as frequently as desired (daily/weekly), or as per the repayment, the structure is drawn by the lender. 8. Even individual applicants can avail this type of facility against their fixed deposits (as a loan) and save on interest.
A business equipment loan is very similar to an auto loan, where the purchased item itself acts as collateral. Because of this, qualifying for an equipment loan is relatively easy. Nevertheless, lenders will still carefully take into account your credit score, years in business, cash flow and other factors. In the case that you default on the loan, the bank is able to repossess the equipment – just as they would with an auto loan.
► Relatively Easy to Obtain Equipment loans has the collateral built right in, which makes it less of a risk for the lender or bank. This makes it easier for you to get approved. ► Preserves Cash Flow One of the best things about equipment loans is you can often find financing with no down payment. This allows you to use your working capital for other pressing needs. ► Adds to Net Value Equipment loans can boost your net value quickly while protecting your cash flow. ► Increases Revenue If you’ve done your research right, and that piece of equipment is what you need to take your business to the next level, an equipment loan is a no-brainer. It’s going to increase your income without the big hit to your operating capital.
This type of commercial vehicle loan is provided to the customers for the purchase of new commercial vehicles for business purpose. Banks offer up to 100% funding on the chassis or base frame value of the vehicle. Some of the banks provide additional funding for the body construction of the vehicles in selective cases based on the borrower’s profile.
Old or used commercial vehicle loan are those loans which are offered to purchase all makes of pre-owned or used commercial vehicles. Under this loan, borrowers can expect to get finance against old vehicles which are up to 15 years old. Most of the banks provide up to 90% funding on the used vehicle’s value or depreciation grid value.
Under commercial vehicle refinancing, banks either offer loan on an existing vehicle which is free of loan or take over an existing commercial vehicle loan and provide additional finance for it based on eligibility. While some borrowers can reduce the monthly EMIs of their existing loan and free up some cash by refinancing an existing loan at lower interest rates, some others can get direct finance on their free vehicles to meet the working capital needs.
Banks and other lenders offer commercial car loan to a broad array of customers to meet their business needs. In other words, this type of vehicle loan can be availed by various segments of customers having diverse profiles. Here is the list of the consumers considered to be eligible for this loan:
► Individuals ► First-time users and buyers ► Small, medium and large-sized fleet owners ► Proprietorship firms and Partnership firms ► Public Limited & Private Limited Companies ► Trusts and societies ► Schools and colleges ► Captive customers and transporters
Salaried and self-employed individuals can co-apply for a commercial vehicle loan with blood relatives or family members. On the other hand, the partners in partnership firms and the directors in private limited companies can jointly apply for this loan.
Commercial vehicle loan stands out to be the most preferred option for borrowers who are either intending to buy their first commercial vehicle or planning to add a new vehicle to their existing fleet of commercial cars due to the plethora of benefits that it offers. Some of the outstanding benefits of this loan are as follows:
Flexible repayment tenure- Usually, the repayment tenure offered in commercial car loan is up to 5 years. This ensures low EMI amount to the borrowers enabling them to pay off the EMIs without any undue financial burden. Multiple vehicle financing- Whether you are an individual borrower or a fleet owner, you can get finance for a variety of vehicles such as tippers, trucks, buses, trailers, tankers, and other small and light commercial vehicles to grow your business. Easy processing- The process of applying for a commercial vehicle loan is easy, fast and convenient. After the submission of all the required documents, banks usually take 4-5 days to process a new or used vehicle loan application. Simple documentation- Commercial vehicle loans come with a hassle-free and quick documentation process. The users can easily upload all the mandated documents online without visiting the bank directly. No credit-score compulsion- Unlikely other loans, commercial vehicle loans don’t require any existing credit score. Borrowers having low or even zero credit score can avail a commercial vehicle loan with ease. Caters to multiple needs: The loan schemes are designed to cater to the borrowers’ diverse requirements including new and used vehicle financing, top up on existing loan and refinancing of loans/vehicles for working capital. Customised solutions: In order to meet the specific requirements of the customers, every commercial vehicle loan scheme is customised according to the vehicle type, loan duration and financial ability of each individual borrower.