You can take business loans to manage seasonal demands: Details
What's the story
Why is it super important for Indian entrepreneurs to know the trends in seasonal business loans? Because those loans are key to handling cash flow and inventory during busy periods.
This article breaks down the big trends, giving you the knowledge to make smart moves for your business.
By understanding what's happening in the world of seasonal loans, you can take the guesswork out of managing your finances.
E-commerce boost
The rise of e-commerce festive loans
The boom in online shopping, particularly during festive periods, has led to a significant rise in short-term loans taken by businesses.
Sellers are borrowing between ₹50,000 and ₹500,000 to purchase inventory in preparation for big sales events such as Diwali and Dussehra.
This trend highlights the increasing dependence on e-commerce platforms for revenue.
Agri-Prep
Agricultural loans peak before monsoon
As monsoon season approaches, there is a surge in demand for agricultural loans.
Farmers are applying for loans between ₹100,000 and ₹300,000 to buy seeds, fertilizers, and machinery.
This increase happens every year at this time, reflecting the cyclical nature of farming and the importance of financial assistance during key periods.
Year-end demand
Working capital loans surge during year-end
A lot of businesses see a big jump in demand as the fiscal year wraps up. To keep up with the demand, working capital loans see a big increase this time of year.
Companies borrow anywhere from ₹200,000 to ₹1 million to help them handle inventory and operational costs smoothly.
Tax cycle influence
GST impact on loan disbursement timings
GST has changed the game for when businesses want their loans.
It's all about timing: businesses are getting strategic, requesting loans at the start of tax cycles so they can juggle cash flows more easily amid changing tax liabilities.
This way, they can avoid financial hiccups caused by unpredictable tax demands.
Credit wisdom
Importance of credit scores for seasonal loans
One of the most crucial factors affecting loan approval rates is the business owner's credit score.
Lenders are more likely to offer favorable terms to individuals with scores above 750.
By keeping a good credit history, you can ensure that you get seasonal loans easily when you need them the most.