According to a CB Insights report, cash crunch is the top reason behind failure of startups. Although the graph of MSMEs industry has been seeing an upwards trend, raising funds remains a challenge and one of the biggest reasons for such businesses shutting down.
Not every startup receives a heavy funding, a lot of them with albeit great ideas fail to survive beyond a year. Why? Lack of funds.
Using gold loans to grow your business: a must-read for the upcoming entrepreneurs
Unlike MNCs, small businesses need quick cash flow to deal with financial emergencies that require a large amount of cash in a short period of time. Most of these businesses cannot wait long to raise funds as it can send them into bankruptcy.
Taking a loan is the next best option available to business owners. But the approval process is time taking that may be demotivating for entrepreneurs. Moreover, small or new businesses often do not have enough collateral to pledge as collateral for the loan.
All these obstacles can be seamlessly overcome by opting for an Easy Gold Loan as it is one of the easiest and a truly practical solution to address the situation. A gold loan is a loan taken by pledging gold articles like ornaments, coins etc as collateral.
The lender lends you money in exchange for your gold kept as collateral.(The loan amount will be subject to various terms and conditions of the lending institution.
Raising funds against gold is fairly simple and can be used to maintain cash flow of the business and ensure smooth operations. Any businessman, self-employed, farmer, trader, or salaried individual between the age of 18 and 75 years is eligible to apply for a gold loan.
Why gold loan is the best option for businesses?
- Hassle-free process
Gold loan offers immediate funds. Raising funds with a gold loan is hassle-free due to its minimal documentation. KYC documents are enough which makes the process quick and seamless. (This is subject to the terms and conditions of the bank lending the loan.)
- No credit history evaluation
Entrepreneurs without a good credit score often find it challenging to secure (other) loans. However, eligibility to secure funds with gold loans do not include a credit score. All that is required is gold being pledged as collateral. Hence, entrepreneurs with a low CIBIL score can also apply for gold loans.
- Quick disbursal
Once the application is submitted, it takes few minutes for the loan amount to be disbursed into your bank account. This way, gold loans eliminate the tiresome process and allow entrepreneurs to focus on growth instead.
- Suitable for financial emergencies
In an event of financial emergency, Sustaining is the most crucial thing for a business. The long and tedious process of loan approval makes it all the more difficult. But with fast gold loan, it becomes significantly easier to acquire funds which makes it a suitable option for emergency situations.
- No dilution of ownership
In order to raise funds, most entrepreneurs have to sell a stake of their business to investors. It often results in lesser control over the operations. A gold loan enables entrepreneurs to raise capital without having to give up control in their business.
- Competitive interest rates
Interest rates on gold loans are attractive and affordable. It ensures that the borrower easily repays the amount without being burdened.
- Flexible repayment options
You can opt for the repayment method that best fits your needs. There is the option of bullet repayment that lets you make the entire payment at the end of the loan term. Or you can repay in EMIs to distribute the amount over a period.
- Protection for your gold
Besides providing entrepreneurs with funds, gold loans also serve as a way to keep your gold safe. Since gold jewelry in Indian culture have more than just monetary value, protecting them is essential. Reputed lending institutions provide the highest level of security for your gold kept as collateral, so you can avail gold loan without a worry.
Gold loans are versatile and can be applied to a variety of situations. Be it a startup founder or a self-employed professional, anyone can avail gold loans suited best for their requirements. For example, Karnataka Bank’sAgri GoldScheme is especially designed for those requiring funds to carry out Agriculture and Allied activities.
Entrepreneurs seeking to focus more on managing the business rather than being occupied with the task of acquiring funds can comfortably turn to gold loans to finance their business. With its seamless approval process and flexible repayment options, gold loan is a highly preferred financing option for several upcoming businesses and entrepreneurs.
