It is a well-known fact that businesses take a severe hit when markets run into a tough phase. Technical industries, which are heavily dependent on automation, run into a massive speed bump. Prices of machinery increase considerably during these phases, thereby, making it particularly difficult for these industries to operate.
The worst affected ones in such situations are small and medium scale engineering businesses. They usually do not have enough cash in their hands to afford expensive purchases and provide for operations at the same time.
In such adverse situations, entrepreneurs can opt for loans which are customised for engineers. NBFCs like Bajaj Finserv, for instance, provide a business loan for engineer of up to Rs. 15 Lakh. Also, these loans have a disbursal turnaround time of less than 24 hours.
Plus, Bajaj Finserv also provides pre-approved offers on these loans. The scheme applies to personal loans, business loans, loan against property, EMI product financing and a plethora of other financial services. Pre-approved offers further simplify the entire financing process, thereby, reducing disbursal time. Applicants only have to provide a few essential details to access their pre-approved offers.
But, there’s yet another question which individuals might ask: How does a business loan for engineer help a small or medium scale organisation endure a tough economic phase?
Businessmen can use their engineer loans from NBFCs like Bajaj Finserv for the following purposes:
- Financing working capital
At times when revenues decrease, businesses need to have a steady cash flow to keep their operations running. Since revenues aren’t enough to finance operational costs or capital finance during a severe economic phase, engineering businesses can do well by availing a loan for engineer.
Since such advances are easy to avail due to less stringent formalities, they become one of the most viable financing options for small and medium scale engineering businesses.
2. Debt elimination
Ease of access to engineer loans also makes it a plausible option for eliminating or consolidating current debts. Repaying existing debts might become difficult when the market is going through a low phase.
Therefore, it is advisable to bring all these debts under one single loan. Also, debt elimination by availing a business loan for engineer serves to increase the creditworthiness of borrowers. This is because opting for this loan to eliminate the existing debts means a reduction in the number of liabilities, thereby, allowing an increase in credit rating.
3. Financing unpaid invoices
During an economic downturn, businesses also find it difficult to receive payments from their outstanding debtors. This, in turn, acts a further impediment for revenue and hence, cash flow.
However, with a business loan for engineer, small and medium scale organisations can back themselves up against the deficits arising from such unpaid invoices. Also, such loans allow businesses to keep their cash flows steady in the face of adverse economic situations.
In addition to this, you can also read 4 tips on how engineering businesses can manage their cash flow.
Nevertheless, a loan for engineer helps businesses manage through the economic crisis, but borrowers should keep a few things in mind before opting for such a loan:
4. Individual creditworthiness
Self-employed or consultant engineers, who contemplate borrowing engineer loans, must keep their credit scores in mind. For small and medium scale businesses, in particular, the solvency of the owners counts for the organisations’ credibility as well.
Furthermore, a sufficiently high credit score allows borrowers the benefit of negotiation with the lenders. Such an advantage is a huge plus point to secure a competitive engineer loan interest rate. Moreover, in the face of adverse economic circumstances, businessmen also end up saving considerably on interest pay-outs due to a strong credit rating.
5. Repayment abilities
Individuals must also keep their repayment abilities in mind when opting for a loan for engineers. They must be sure of their capability in making timely EMI payments, and ultimately clear the loan.
Therefore, businesses must opt for an engineer loan only when they are sure on these fronts. And if they’re applying for these advances to get over a tough economy, then self-evaluation on these factors becomes all the more necessary.
A business loan for engineer can be availed by following a few simple steps. Another advantage of such loans is that they do not require the attachment of any collateral to them. This, in turn, serves to reduce the processing time for the loan, thereby, making a viable financing alternative.