Top Five Tips to Avail a Business Loan

You may have the simple desire of starting your own business, or expand the current production line. For all such entrepreneurial ventures, financial bodies in India offered dedicated business loans. Such loans are offered to business owners or aspirants who plan to start one.

Small business loan are classified as SME loans in India. SME stands for Small and Medium-sized Enterprises. As the name suggests, such loan is only offered to emerging businesses. To avail such borrowing, here are the top five tips that you should take a look at.

1.   Who provide SME Loans

The needs and financial requirements of every business are different. After considering such diversified financing needs, banks and NBFCs provide loan. There are several NBFCs in India that offer competitive SME loan interest rates over lending, versatile repayment options, and active customer service to turn your business dream into reality.

     2.  What are types of SME loans


There are different types of SME loans which are provided with various objectives. The three prime objectives include increase in working capital, expansion of business, and margin money funding (to purchase additional machinery). So, before you file an application for the borrowing, make sure you know your borrowing motive.

     3.  Get acquainted with the Loan Process

Availing such loan is quite simple, only when you follow the mentioned procedure. During the time of application submission, ensure to submit the valid documents.  Also, develop a good rapport with the credit manager if you look forward to speed up the process. Once all documents are verified and loan application is assessed, you will get the required funding.

     4.   Avoid over-drawing

Many banks provide the facility of making additional withdrawals apart from the borrowed principal amount. However, the borrower should understand that such service is only provided as a privilege and should not be abused. Furthermore, there are separate charges levied on the additional borrowings. So, avoid over-drawing.

    5.    Check the Tenure Options

Loan duration will vary on the basis of borrowed principal amount. SME loan tenure can range from 12 months to 48 months. Only self-employed individuals such as doctors will get extended tenure of up to 60 months.

Three Reasons to Invest in Fixed Income Schemes

What are Fixed Income Schemes?

Fixed Income Schemes invest in securities such as bonds, debentures, government securities, money market instruments and other similar instruments. The main purpose of such schemes is to invest is to generate a steady income against a balanced investment risk.

Fixed Income securities carry minimum investment risk as the main motive is to offer the promised returns to the investors. On the other hand equity securities have no such obligation to pay back the investors. Though the promised return is comparatively higher, equity funds have high risk of investment loss. So, conservative investors prefer going with fixed income schemes.

Following are a few schemes that offer investment benefits to investors:

More tax efficient

Fixed Income Schemes are more tax efficient than several other investment instruments. After a year, the invested income is always treated as a long term capital and is taxed at 10% or 20%. If you hold the debt fund for a longer duration or period, then the indexation benefit is higher. For instance, DSPBR Banking & PSU Debt Fund offers extensive tax benefits to investors by heavily investing in debt and money market instruments, which have special tax exemption.

Better returns

The longer the period of investment, higher are the returns. Funds that invest in long term bonds are not applicable to changes in rate which occur in short-term debt funds’ investments. For instance, DSPBR Government Securities Fund has a longer lock-in period and directly invests in GOI bonds. As lock-in period is longer, it offers better returns as compared to other short term funds.

More flexible

Fixed Income Schemes are more flexible than others and a person can invest small amounts in them every month. Certain schemes primarily invest in money market instruments that offer combined benefit of liquidity and growth. For instance, DSPBR Money Manager Fund has a portfolio of money market instruments that offer better gains than regular debt instruments.

Plan Your Golden Years after Retiring with a Retirement Planner

What is a Retirement Planner?

Retirement Planners are extremely useful to understand your financial goals in the long run. Basically, they are used to figure out your post-retirement goals that assess the amount of money required to sustain the regular flow of life.

A retirement planning calculator keeps track of your accumulated financial assets along with pensions, home equity, social security, part time work, etc as well as ascertains the future projections of the investment growth. Good retirement planning is essential for maintaining steady retirement income.

Why do you need a Retirement Planner?

Since most people are busy in their lives and work, it is difficult to multi-task and also plan for your future. This is when a retirement planning calculator is used. It helps you to achieve long term financial goals through periodic small investments in MF schemes.

How to plan your retirement using Retirement Planner

1. Decide the age for retirement.
2. Decide the annual income you'll need for your retirement years.
3. Add up the current market value of all your savings and investments.
4. Determine a realistic annualized real rate of return (net of inflation) on your investments.
5. If you have a company pension plan, obtain an estimate of its value from your plan provider. 
6. Estimate the value of your social security benefits. 

Steps to use Retirement Planner

It is an extremely simple process and requires you to fill in the form, providing your basic details. Please read below steps to use the DSP BlackRock Retirement Calculator.

• Enter your present age.
•  Now enter your monthly expenses.
• Now enter number of years left for your retirement.
• Annual inflation rate by which you expect your monthly expenses to increase.This  needs to be entered in percentage form.
•  Your expected life expectancy, in years.
•  Annual return you expect to earn on your retirement corpus pre-retirement. Please  write in terms of a percentage.
• Annual return you expect to earn on you retirement corpus post-retirement. Please  write in percentage form.

This retirement planning calculator helps you work towards your client's retirement corpus and tells you the amount your client should save today to achieve the desired savings corpus at the time of retirement.