Debt Funding Overview
For starting, expanding, or running a business, funds are of prime importance. These funds can be raised in two ways, debt funding and equity funding. Equity Funding is raising finances by selling the shares of a company. Moreover, debt financing occurs when a company borrows money to be paid back at a future date with interest. This is available in both secured and unsecured funding. The funds can be sourced through Banks, NBFCs, or Financial Institutions.
But there are certain myths and misconceptions associated with how to obtain debt funding. Below are a few of them:
1. Funding requires high collateral
Traditionally, debt instruments are used to come up with collateral. But now it can be availed even without collaterals. The collateral-free unsecured loans may have more interest rates as compared to secured ones. In the case of secured funding, the amount of collateral and the amount of loan should match. Whereas, in the case of unsecured loans, the funds are even disbursed based on the credit score of the borrower and his relationship with his banker.
2. The process of funding takes a longer time
The funding procedure depends upon various factors. The lender has to submit a variety of documents like KYC, financials, and specific documents. Even though the process looks lengthy, we arrange it as fast and quickly as possible. Now the clients do not have to wait for months for disbursement, it can be done in merely days.
3. The lower amount only financed
The clients now can avail the higher number of finances too. The only restriction is eligibility. Once the client has a creditworthy score and fits into the eligibility criteria, the higher amounts can also be availed through both secured and unsecured ways.
4. The ROI is high in case of unsecured funding
The ROI majorly depends upon the availability of collateral, CIBIL score, and other economic criteria. The higher the ROI, the greater will be the risk, and the lower the ROI, the lesser will be the risk. Hence, the ROI totally depends and changes from case to case.
5. Debt funding come up with heavy risk
The loans used to be risky earlier. Today if you are doing it with the right lender, then there is no need to worry. We at Terkar Capital help to bridge the gap between eligible borrowers and capable lenders. We understand the need and requirements of the clients and work accordingly with arranging a quality and transparent procedure that vanishes the risk in funding.
6. Fewer products available in debt funding
This is not the truth, as there are several debt products available in the market that one can opt for and avail of such services. There are conventional as well as non-conventional debt funding options. The products are chosen to depend upon the financials and credit scores of the clients.
7. No flexibility in funding
The debt funding has flexible options to carry out. Also, many services provide smooth repayment options which makes the funding work hassle-free.
8. You cannot use mortgaged property or assets.
Most borrowers worry whether they can or cannot use the mortgaged property. Moreover, the property for a mortgage is either a residential or commercial one, which can not keep vacant or unused. As long as the borrower does not default on his or her loan payment EMIs, he or she can absolutely use the mortgaged property.
Understand the execution of Debt Syndication here.
Why Choose Terkar Capital?
We at Terkar Capital understand the customer’s needs, strengths, and weaknesses. With respect to the edges, we arrange appropriate financial instruments. Our trained executives will assist you in the entire procedure while applying for loans. Even after the disbursement of the loan, if the client faces any issues, we are available to help until the end of the tenure of the loan. We have expertise in the analysis of the market and offer a reasonable ROI to borrowers. So whenever it is raising finance, it’s Terkar Capital!!
