Traders are the individuals who own small businesses that are independently owned and operated companies that are limited in size and revenue depending on the industry. Small trade businesses include service or retail operations such as convenience stores, small grocery stores, bakeries, hairdressers, carpenters, electricians and Internet-related ventures such as web design and graphics designing. Some professionals also operate as small businesses, such as lawyers, accountants, health workers and teachers. Like all business traders also require finance to manage their small business.
Lets us understand why traders need business loans :
1. A trader may want to start a business like opening a jewellery shop, garments super chain etc. However, most of the time, there is a high cost involved with starting a new venture. Business loans act as an anchor to sail through the need for finance.
2. Stagnation is the primary foe of any business. Every trader wants to expand itself. Expansion can be in the form of expanding the trading business in a new location or introducing a new line of business, business loans help a trader in meeting that requirement.
Read Also : Tax Benefits of Income-Tax Act – Section 80 C
3. Technology saves time, cost and energy. Traders have to evolve their existing technologies to confront the big business and their peers. Business loans help in acquiring new technologies and upgrading the existing ones.
4. Importance of employees is paramount. They are the lifeblood of a business irrespective of its size. Employees can help companies to reach the pinnacle. Thus, the expenditure of employees becomes essential. Business loans help in hiring new employees and training existing ones.
5. The trading or small business requires a reasonable inventory to meet variation in the production demands, cater to the seasonal requirements and take advantage of the price increase. Business loans help in achieving that requirement.
Sources to avail the business loans for traders.
Traders can get the business loans from banks. Most banks provide business loans for traders. However, loan approval from a bank is not a cakewalk as they check the creditworthiness of the business and the individual. Further, banks may also verify the employment history of the company. Individual must compare all the terms and interest rates of the different loans for traders and select the one which fits their requirement
- Government grants
Governments are mindful that small business plays a pivotal role in the economy; they might employ a lesser no. of people and may not involve in the considerable business. However, aggregately they play as crucial a role as the big business houses. The government tries to help small businesses by providing grants. The government of India has set up a Small Industrial development organization, credit guarantee scheme, microfinance schemes and several other schemes to provide the necessary support. Further, traders can also take loans from national small industries corporations.
Also Read: How Can Financing Help Your Business Growth
- Lending companies
Small businesses can also meet their financial requirements with the help of the lending company or peer to peer finance companies. Most of these companies provide loans instantly, and it involves a very less documentation process. However, the interest charged by these companies is way higher. Traders must gauge all the options and should select the one which best fits for their financial requirement.