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Things to consider before applying for a business loan

A type of  loan that is explicitly provided to business owners, whether to start their business or to fund a specific need of the business that can be either to expand the business or to purchase raw materials for manufacturing and so on. As all other loans, business loan is also provided with some guarantees along with a fixed interest rate which needs to be paid along with the principal amount for a set period of time.

Whenever there is a need for a business loan, every business owner has to keep certain things in their mind:

Consider the top institutions for taking the loan.

Business loans can be provided by many different types of sources such as Banks, Non-Banking Financial company (NBFC), Individual Lenders etc. While taking a business loan always go for a trusted source so that you don’t get cheated during the whole process. A non-trusted source may either void the initial agreement or demand for more interest in-between or can harass for money if there is a slight delay due to any emergency situation. In order to avoid all such unforeseen situations it is always advised to go with a reputed institute.

Always consider that institute which provides best Loan interest rates.

After shortlisting the top institutes compare the interest rates and go with that lender that is providing you with the lowest interest rates, this will benefit you in the long run. It is always useful to save money from your out flow cost to increase profit of your business.

Always calculate required loan amount before proceeding.

It’s very crucial to be very precise with the Loan amount. Do a proper due diligence and figure out what loan amount is required before going ahead. Lesser amount will hinder your business and cause difficulty whereas if you take a larger amount it will add an additional burden and unnecessary load towards your profit margin and eventually you’ll end up paying much more in interest than required. It is wise to take help from the experts in order to be on the safer side and for smooth functioning of the business. There are a lot of financial management firms such as VITT management consultants, who along with their team of financial experts are available to help businesses with all the corporate finance services in India as well as UAE. VITT management consultants are one of the best business management agency in India and UAE to guide your business for making best decision regarding your business loan.

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Improving cash flow of your business with Debt consolidation

For most companies; Loan, Funding or Financing are an important aspect in order to survive. The money that companies raise is used either to fund for a new project or purchase/Rent a Tool and so on. During this process sometimes the top management oversees the losses they are making due to high pressure of delivery.

It is very important to reduce the losses in any form for better profit margins. First let us understand the basics of it.

What Cash Flow Really is:

Cash Flow as the name suggests is the total flow of cash both incoming and outgoing in the business. It is crucial for any company to create a cash flow statement to track all the incoming and outgoing cash. This statement will provide a clear understanding of how the business is performing and where exactly the money is going and where it is coming from with exact numbers.

Understanding Debt consolidation:

Debt consolidation is the practice of replacing multiple loans with a single loan. Often companies take multiple loans from several creditors and in this process they often end up paying more. Debt consolidation helps companies reduce the financial burden by smartly switching the entire loan to a single creditor.

How debt consolidation can impact cash flow:

While consolidating debt with a single lender, that lender might provide the option to extend the loan tenure, thereby decreasing the total monthly payment. Paying less each month can increase cash flow and allow more flexibility and opportunity for growth of business. It is extremely important to work with a lender who understands your business so that they know the value of the purchases that you are making for your business.

Financial consultancy firms that provide professional business management services often suggest their clients to opt for Debt consolidation in order to increase profit of their business.

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Ways to Reduce Financial Burden of your Business

Although every business leaders try their best to maximize profit of their business by generating more business and minimizing the outgoing cash flow, still there are a lot of leakages which might prove to be a burden to the business. There are a lot of different ways in which one can reduce the financial burden of the business that varies from one company to the other depending on the cash flow structure which that particular business has created.

Below are few cost cutting strategies that can be applicable to almost every business

Reducing supply expenses:

Always look for a better pricing for office supplies as well as other essential materials for the business. Nowadays, there are multiple options available both online as well as offline which will prove fruitful in reducing the supply cost.

Cutting down production costs:

In a production environment there is always some room for reducing the cost. Find out those gaps along with that try selling the leftovers to earn a little cash for the business. Office space management can also help bring down the cost, if at all there is some unutilized space in the office there is always option to rent it to generate some cash.

Reducing cost on financial accounts:

Manage debts and loans more efficiently. Try calibrating current financial situation along with future incoming cost and then borrow the amount which will be sufficient to fulfill the needs of the organization. Comparing insurance to get the best value at a lower cost also helps in reducing the financial burden.

Modernizing marketing efforts:

Advertisement is extremely crucial, but with changing times modes of advertisement and active audience have switched largely towards digital platforms. Try balancing the mode by switching most of the advertisement budget towards digital advertisement. Create list of email ID’s and phone numbers acquired through various campaigns. Delegating most of the work to an efficient and cost effective marketing agency helps a lot in bringing down the advertisement costs.

Hiring a cost cutting expert:

Finally if you are unable to bring down the expenses on your own it is highly advisable to hire an expert to provide business management services. There a lot of companies who are experts in providing corporate finance services such as VITT management consultants, who with their team of experts have been helping organizations to optimize the cash flow of businesses and helping their clients to achieve success.