As a business owner, you know that managing finances can be a challenging and stressful task. Whether it is for managing day-to-day expenses or expanding your business, you need access to funds that are quick, flexible, and hassle-free. Traditional loans may not always be the best option, given their lengthy processing times and complex eligibility criteria.
That is where Loan Against Securities (LAS) comes in as a perfect overdraft facility for business owners. By pledging your securities as collateral, LAS provides businesses with a quick and efficient way to access funds as and when required.
Loan Against Securities is a perfect line of credit for business owners who require urgent funds without going through the rigorous process of credit checks. Let’s see why is a loan against securities ideal for business owners
✔️ Quick and Convenient Access to Funds
Time is of the essence when running a business, and sometimes you need access to funds quickly. LAS provides a convenient and quick way to obtain funds by leveraging your securities as collateral. With LAS, you can obtain funds within a few days of the application being approved, giving you the flexibility to manage your finances effectively.
✔️ Competitive Interest Rates
One of the most significant advantages of LAS is its competitive interest rates. The interest rate is often based on the security provided, the tenure of the loan, and the amount borrowed. LAS typically offers lower interest rates than traditional loans, which can help you save money on interest payments and reinvest that money into your business.
✔️ Flexible Line of Credit
Another advantage of LAS is its flexibility. With LAS, you have a line of credit that you can use as and when needed. You can withdraw funds as required and only pay interest on the amount utilized. This provides you with the flexibility to manage your finances effectively and avoid the burden of a fixed repayment schedule.
✔️ Wide Range of Securities as Collateral
LAS allows you to use a wide range of securities as collateral. You can pledge stocks, bonds, mutual funds, and other securities to obtain funds. This means that you can leverage your existing investments to obtain funds quickly and easily, without the need for additional collateral.
✔️ Easy Documentation Requirements
Unlike traditional loans that come with extensive documentation requirements, LAS offers easy documentation requirements. With LAS, you only need to provide minimal documentation, making it easier for businesses to apply for and obtain funds quickly. This means that you can focus on growing your business instead of spending time on paperwork.
What makes Loans Against Securities better than Traditional Loans?
Suppose you own a restaurant, and one day, your kitchen equipment suddenly breaks down. You need a substantial amount of funds to purchase new equipment immediately. You approach your bank for a personal/business loan, but due to your bad credit score, the bank refuses to provide you with a loan. In such a scenario, a Loan Against Securities can be a lifesaver for you. You can pledge your securities and avail yourself of the required funds in no time.
Let’s understand what makes loans against securities better than traditional loans with the help of the following chart:
|Criteria||Loan Against Securities||Personal loan|
|Interest rate||Lower interest rate as it is a secured loan||Higher interest rate as it is an unsecured loan|
|Loan amount||Higher loan amount based on the value of securities pledged||May attain lower loan amount based on credit score and income|
|Repayment options||Flexible repayment options with longer tenure||Fixed EMI for a fixed tenure|
|Credit score impact||Helps in improving credit score with timely repayments||May impact credit score negatively if payments are missed|
|Tax benefits||Interest paid on a loan is tax-deductible if used for business purposes||No tax benefits|
Comparison chart: Loan Against Securities vs. Personal Loans
How to Obtain a Loan Against Securities?
- Check Your Eligibility
Once you have identified the securities you wish to pledge, check your eligibility for LAS. The lender will typically look at factors such as your credit score, the value of the securities, and your repayment capacity before approving your loan.
- Identify Your Securities
The first step to obtaining a Loan Against Securities is to identify the securities you wish to pledge as collateral. You can pledge stocks, bonds, mutual funds, and other securities that are approved by the lender.
- Submit Your Application
The next step is to submit your application for LAS. With easy documentation requirements, you can typically complete your application quickly and easily. Make sure you provide all the necessary documents and information to ensure a speedy approval process.
- Get Approval and Disbursement
Once your application is approved, you will receive the loan amount in your account within a few days. You can then use the funds as required to manage your finances effectively and grow your business.
After discussing the benefits of Loan Against Securities for business owners, it can be overwhelming to start finding the right lender that meets your specific requirements. This is where Rurash Financials can help you.
With over 800 approved securities and multiple lender options, Rurash Financials can help business owners like you to avail of loans against securities at the most attractive interest rates and flexible repayment options. We have a streamlined process that ensures quick approval and disbursal of funds, making it easier for business owners to access the funds they need to grow their businesses.