Why you Should Choose a Business Bank Account for Working Capital

In recent years, the government’s push for going digital has gained traction in both private and public centre enterprises. The financial system, be it securities exchange or taxation or transactional exchange, has come under increased legal scrutiny due to digitisation. In essence, it is a noble venture that aims to do away with age-old methods of paper banking and physical verifications, but as early adopters, many small business owners are finding it a difficult transition. One of the main reasons behind these difficulties is the single-use bank accounts for personal and professional income.

In some cases, the tax authorities and banks have opened inquiries due to a mismatch between an individual’s declared incomes and actual account activity. However, later realizing that most of these account holders are small business owners using savings accounts for their professional use. So, if you are a small business owner who is yet to segregate his/her personal and professional incomes, the time to do so is quite at hand. Also, there are several other benefits of having a business bank account than simply the convenience of avoiding unnecessary legal scrutiny.

One such advantage is having access to quick finance. SMEs in India can use a current account facility for business transactions. These accounts do not generate any interest but do give selective access to working capital finance, albeit with a catch. An business has to pledge an asset as collateral before the funds are credited to its current account. So, in most cases where an SME does not have the assets to secure a working capital loan from a bank, the owner ends up using a personal account for professional use, because there is no perceived need for him to get a current account.

However, the advent of Fintech firms like Lendingkart has changed that perception by offering unsecured business loans for small and medium businesses. Business owners can now have both a current account and an access to working capital finance without pledging company assets. Plus, these loans are offered at relaxed terms and with easy repayment schedules to ease the financial burden on SME owners.

Given this change, the banks too have adapted their current accounts divisions by creating sub-categories that cater to specific business needs. Here are some of the things that are made simpler with a business account for your SME.

  • Digital Banking Services are a part of the current account. These personalized services ensure that you can access your working capital funds anytime, anywhere. Digital banking is also a more transparent way of conducting business than the usual exchange of cash. Incidentally, a lender is also more likely to trust your business credentials if you have a well-maintained current account for your business with digital transactions enabled.
  • Salary Remittance to Employees is also simplified by using a business bank account with facilities like digital approval of paychecks and invoices and real-time transfer of funds to dedicated salary accounts.
  • Checks Payable at Par is another of business bank account advantages that can help in streamlining your financial transactions across state borders.
  • Personalized Forex Rates for businesses who have clientele outside the country are offered by several banks. This facility helps in seamless international exchange of monies.
  • Interest Earnings, while not a traditional feature of current accounts, is also being explored by several public and private sector banks to market themselves as more business savvy alternatives.

So, we hope these are reasons enough for you to switch your business dealings to a current account and reap the benefits for your SME. In case you need a quick business loan you can always apply for one with Lendingkart by visiting our website at Lendingkart.com or downloading the Lendingkart Finance app on your Android device. We offer business loans at lower interest rates without requiring any collateral and disburse funds within 3 days of document verification.

Small Business Trends to follow in 2018

Every year pans out differently for small business owners. The rapidly changing scenes of our growing digital economy means new trends and practices are getting in and out at regular intervals. Take for example the phase of demonetisation and then the implementation of GST, both of these decisions have had quite an impact on small business owners and influenced their financial, technological, and promotional policies.

Today, we are sharing some trends that a small business owner needs to keep an eye on in 2018.

Moving to the Cloud

Software as a solution (SaaS) and cloud based technologies are taking over the world of small, medium and large scale business owners alike. These technologies have marked quite a discernible shift in IT spending as more companies are now embracing the sharing economy instead of spending incredible amounts on in-house IT development. Digitisation and sharing industry is expected to grow even further down the line and if your small business has an online component, you should start looking for ideal partners to integrate your services with the digital world.

Personalised Marketing

With the rise of Big Data and machine learning AI systems, online marketing has become the hotbed of business activities. The humongous amounts of data coming in from digital devices and platforms and the tremendous power of cloud computing has made personalised marketing possible, where a user sees and consumes high-value personalised content at every step. Modern marketing tools from Google are widely used for identifying target audiences and creating location specific content to generate more leads and conversions.

A major driver of the personalised marketing bandwagon is the smartphone. Mobile Ads are now generating more leads than their desktop counterparts and as a small business owner, a mobile friendly website or app can help you gain crucial advantage over the competition.

Similarly, social media marketing and paid ads on platforms like Facebook and Twitter have also emerged as a leading personalised marketing platforms. With billions of people logged in worldwide, these platforms are yet to witness the long-tail growth in the SMB category and can be your way to success.

Digital Finance

A few years ago, the advent of e-commerce was a new era in the world of business and now that distinction has gone to digital finance. Fintech firms have made it easier to get business loans online by offering quicker approvals, lower interest rates, and flexible EMI schedules. Furthermore, re-approvals of loans once they are repaid is now instantaneous. Such facilities have not only improved the ease of doing business but have also spurred economic investment in the country.

Moreover, Fintech firms like Lendingkart are actively educating small business owners on best business practices to make them more agile and street smart in money management. For example, more small business owners are now aware of keeping their private and business finances separated. Also, the number of business owners applying for small ticket working capital loans has increased in recent years. If you are wondering how that makes a difference then it’s about time you too have a closer look at this financial trend.

Small business owners often make the mistake of using the company’s capital for working capital expenditure. Since the working capital expenditure is a recurring expense (on daily, weekly and monthly basis), eventually the SME owner runs out of money to keep the business afloat and doesn’t have any assets to show for all the trouble. On the other hand, business owners who are utilising working capital loans to run their daily operations while using the company’s capital to invest in equipment and establishment have a two-fold advantage. They are running business operations with a loan that will pay for itself and they are investing in assets which will pay for themselves, thus it’s a win-win for them.

Concluding thoughts

Workplaces are going to change significantly in coming years. Digitisation, e-commerce, automation, cloud computing and online finance are no longer just buzz words but stark realities of our time. As a small business owner, embracing the digital economy is the only way forward for you, and the sooner you do it the better will be the results.

To know more about us, visit www.lendingkart.com

Best Free Accounting Software for Small Businesses in India

Did you know that you can save a lot of time and money by adhering to smart accounting? Most small business owners do not always prioritize accounting, as there are other tasks on their to-do list which seem more urgent. However, there is a reason behind accounting being a separate arm of business management, accounting enables efficiency and transparency in business operations.

Nowadays, the integration of IT solutions with business operations means that a small business owner can easily manage cash flow, invoicing and payrolls with automated accounting software.

Here we are sharing a list of best free accounting software for small businesses that you can test and deploy for your enterprise.

ZipBooks

A popular choice among small business owners, ZipBooks simplifies accounting with an easy-to-learn interface and some powerful accounting features. The ZipBooks starter option is free and lets you create unlimited invoices for any number of vendors and customers. You can also connect your bank account to the software and manage your business’s bank account.

Marg

Developed specifically for use in India, the Marg Accounting Software is totally free to use and offers a comprehensive list of accounting features such as ledger management, cash flow control and preparing detailed balance sheets. The software also integrates various forms required by Indian Business Law for e-filing of tax returns online.

Tally ERP 9

Tally remains the most popular accounting software in India. It has a free version which you can utilise to manage accounts and keep track of your finances. There are many institutions offering Tally courses in India, so using this software also gives you ready human capital to invest in.

Profitbooks

It us a cloud based accounting software which can be accessed from any device anytime. The free version of Profitbooks allows bookkeeping and invoicing to give you accurate accounting information. You can also connect to the Profitbooks Live Chat to learn about its advance features.

GnuCash

This is an open-source personal and financial accounting software. Open-source softwares are community managed, hence they receive updates more frequently and a large community of devs means new features are available more frequently and bugs are removed quickly. However, open-source software may sometimes (although it’s rare) crash and cause data loss. The GnuCash is free and available for Linux, Mac OS X and Microsoft Windows.

So that completes our list for free-accounting software for small businesses in India. You can manage your finances and keep your working capital in check by switching to prudent accounting management with this software. Speaking of working capital, if you are having hard time maintaining the daily cash flow, consider getting a short term business loan. To know more about fast business loans in India, visit us at www.lendingkart.com

Managing Your Working Capital can be the Key to Business Success

Working capital management allows you to keep your company’s financial fundamentals in check and leads the way for operational success. Effective working capital management is the hallmark of every successful business venture as it represents a synergy between the business goals, profitability and liquidity of the business.

As you know, working capital is the difference between the current assets and current liabilities of a business, and is utilized for running day to day business activities. Thus, working capital essentially represents the efficiency of your company’s operations and its financial stability in the short-run. If you don’t have enough working capital to cover your short-term debts and expenses, then your business may face operational or even existential trouble in near future.

Here are some pointers to further emphasis the need for having adequate working capital in your kitty.

  • A business requires a bare minimum of cash-flow to maintain itself on daily basis. These cash requirements are fulfilled by working capital.
  • Working capital is the key for debt and inventory management. If you cannot secure the inventory your customers are looking for then your business operations will suffer. Adequate working capital balance allows you to make emergency purchase of stock and services to keep your clients happy.
  • Working capital may play and important role in your financial dealings such as applying for small business loans, mergers and partnerships.
  • Not having enough working capital can ultimately lead to insolvency as your business will not be able to meet its debt obligations.

How to Manage Working Capital?

Working capital management is an accounting strategy. By making some financially prudent decisions, you can ensure that the balance between your assets and liabilities is maintained and you still have enough ready cash to fulfill your daily commitments. Here are some of the things you can do to effectively manage your working capital.

  • Manage your inventory. When you are selling physical goods, a simple inventory management technique i.e. to balance your demand and supply can help you save more cash. Needless to say, this cash then becomes a part of your working capital.
  • Prudent accounting can also ensure that you never run out of working capital resources. Once again keep a track of accounts payables and accounts receivables to keep your books up-to-date. Lagging behind in collections and payments often causes problems later on.
  • Do a monthly analysis of your inventory turnover ratio and bill collection ratio to optimise your business operations and establish a cycle. This will help you in anticipating the expenses in advance and allow you to keep cash at hand when the need arises.
  • Apply for a working capital loan. A short-term business loan is the easiest way to get ready cash for day to day operations. A working capital finance frees-up your capital for investment in equipment and site while you repay the loan amount in flexible monthly installments.

Lendingkart Small Business Loans

The thing that matters most when you apply for a business loan is the time it takes for processing and disbursement. Bank loans are cumbersome due to their inherently lengthy application, verification and disbursement processes. That’s why Lendingkart has kept the process quite simple by making it completely online.

You no longer have to Google all day about ‘how to apply for a small business online’. Simply create a Lendingkart account, fill in your loan requirements, and let us know about your business.

Once that is done, we will offer you a loan quote, choose to accept it and upload the documents for online verification. If all things check out, you can get a small business loan within 72 hours of application.

Ready to apply for a business loan with Lendingkart? Click here to proceed.

Working Capital Financing to Make Your Business Agile

Working capital keeps your business upright when you hit a snag or when the market is not performing as expected. In simple terms, working capital is the cash you need to carry on day-to-day business tasks. It is also calculated by subtracting your current liabilities from your current assets. Falling short on working capital can lead to a loss of flexibility in operations, ultimately leading to reduced credibility with financiers, vendors and customers.

Working capital floating just above the red line is also bad for your enterprise, especially if you own a small business. Because when you are barely managing to survive in the market, you will not be able to take advantage of new business opportunities to expand and grow your company.

However, always keeping sufficient working capital at hand is easier said than done. Small businesses are generally cash-strapped and depend on timely sales and payment of invoices for their working capital. Here, having a clearly defined credit policy can help you out. It will also give you an idea of the customer credit you can afford without draining your working capital.

In this post, we are sharing a few of such simple yet effective measures you can take to keep your small business agile and competitive.

Fast Track your Payment Collections

The best way to keep your working capital funds ready and steady is to ensure that you are collecting your payments the moment they are cleared. Don’t wait till the end of the month to bill your clients, generate your invoices as soon as the goods or services delivery is confirmed. Billing early also ensures early clearance and hence an early top-up of your working capital.

Never Finance Fixed Assets using Working Capital

If you have used up all your cash then your business will look riskier to financial institutions and potential business partners. Financing fixed assets such as equipment with working capital also reduces your daily, weekly or monthly spending threshold. So, instead of depleting your working capital, use long-term loans to pay for financing fixed assets.

Using Asset Refinancing to Generate Working Capital

Asset refinance helps your cash flow by releasing cash against the value of an asset that you already own. You can sell the asset at its current value to a leasing company, which will then lease it back to you for a specific period of time in exchange for rental payments. Furthermore, fixed asset refinancing will also protect your business from asset depreciation.

Apply for a Working Capital Loan

An unsecured working capital loan for small businesses can ease your working capital worries. The logic is simple, to gain profits and business growth you will need to invest more in your small business. A working capital loan for small business allows you to afford the inventory required by your potential clients, thus, helping you turn them into real account receivables.

Working capital loans are also quite easy to secure if your business has a veritable track record. You can even get a working capital loan approval in less than 24 hours and funds transfer within 3 days with certain financial. If you are wondering where can I get a business loan that fast, visit www.lendingkart.com to apply for a business loan.

Lendingkart has an ‘online only’ loan application process and provides small business loans up to ₹1 crore.

Business Loan Interest Rates – Factors and Features to Getting an Optimal Rate

How Business Loan Interest Rates Work

Ever wonder why business loan interest rates vary from lender to lender? There are several factors based on which every financial lender such as a bank or an NBFC determines the interest rate for any loan. The same holds true for a business loan as well. The more you satisfy these factors the lower your interest rate and accordingly, a higher interest rate is the result of such criteria not being satisfactorily met.

Here are the factors which are considered by banks and NBFCs for determining the interest rate for your business loan application.

Credit Score


The most talked about of all factors which determine your eligibility for a business loan and hence your interest rate, is credit score of your organisation. Some financial institutions also account for the credit score of the business owners to gauge their temperament for repaying loans. While having a healthy credit score helps in making the loan process smoother, you can get a business loan with an average credit score if you get the other variables right. The norm is to have a credit score more than 700 to be considered eligible and more than 750 to be favourable.

Age of Your Business


If your business is relatively young/new, lenders will consider your business loan as a high-risk entity, and charge you a higher rate of interest. Then again, having a long-running business does not guarantee a lower interest rates, as is covered in the following point.

Profitability of Your Business


Everyone likes a profitable business. That is especially true when it comes to lenders. If you are running an efficient organisation with large profit margins, lending institutions will most likely discount your business loan interest rates for it.

Volatility of Your Industry


Another important factor considered by lenders while calculating the interest rate for a business loan is the prevailing market conditions in a certain industry. If the market is excessively volatile, the interest rates go up, and if there is a projection of short or long-term stability, the interest rates are likewise relaxed.

Assets and Infrastructure


While unsecured business loans do not require a collateral, having a sound infrastructure and assets help if you are applying for loans in the range of six-digit figures.

Small Business Loan Interest Rates – Fixed vs. Variable


Based on the above factors, a lender will offer you an interest rate on the loan amount. The rate can be fixed or may fluctuate based on a market model that dictates variable interest rates. Although most people prefer a fixed interest over a variable interest rate, both have their advantages. If the market prospects are looking good, a borrower can save on interest payments by opting for a variable interest rate.

Lendingkart Business Loan Interest Rates


At Lendingkart, we understand the needs of our customers and therefore have devised a smart system based on analytics and machine learning. The system allows us to offer customized interest rates to our customer, thus ensuring that every loan application is sanctioned with the lowest possible interest rate. Thus, relieving MSME loan applicants from the dilemma of choosing between fixed and variable interest rates and giving them the best of both worlds.

If you are looking for an online business loan, visit our website to get a quick quote and apply for a business loan in a few simple steps.

Business Loan – Importance of Choosing the Right One

The Importance of Choosing the Right Business Loan

When you are considering taking a business loan, there are a lot of things that you check out, both online and offline. One might check out online EMI calculators, ask friends about online business loans, visit the websites of online loan providers and do a comparison of business loan interest rates. This due diligence is an important part of the loan application process and helps you understand the limitations and opportunities offered by different commercial loans.

At Lendingkart, we believe that choosing the right business loan is very important for MSMEs as it helps them in drawing out the full benefits of a loan. Here, we are sharing the points to look for when applying for a business loan online.

Fulfilling the Basic Criteria

It is very important to apply for business loans that your company can easily service. When you apply for a loan, a hard query is sent to the credit rating agencies. Too many hard queries can bring down your overall credit score. Therefore, applying for a business loan for which your company is completely eligible is quite important. It will not only ensure quick disbursals but will also help you build your credit rating further up.

Getting the EMI Calculations Right

Another important factor when taking a business loan is calculating the EMIs and planning your repayments accordingly. Sometimes you might end up taking a business loan which your business can easily repay and yet miss out on EMI payments. This happens when you do not calculate the EMIs correctly.

For example, you apply for a business loan of ₹10,00,000, which your business can easily repay in 12 months. However, you erroneously opt for an 8-month EMI schedule, which stretches your resources, wasting the benefits of the loan or even leading to missed EMI payments.

Selecting the Right Lending Partner

While banks are a common source of medium and small business loans for entrepreneurs in India, opting for a modern business financing institution might be a better idea for getting working capital finance. Non Banking Financial Companies offer several benefits such as low processing fees, short turnaround times, and easy business loan renewals.

At Lendingkart, we have simplified the loan application process by making it completely online. Lendingkart interest rates are customized based on business prospects of every individual applicant, thus making it easier to get a quick personalized business loan online.

Flexibility in Repayments

A business loan offered with the option of a flexible payment schedule is a boon for MSME loan applicants. A commercial loan that lets you choose from a variety of repayment schedules gives you the freedom to focus on business development rather than on payment due dates.

Lendingkart Finance lets you choose a customized repayment schedule so that you can repay your business loan comfortably. If you are doing great in your business, you can even prepay the full loan amount without any pre-closure charges.

Concluding Thoughts

A business takes a loan to invest in its growth, therefore selecting the right business financing product remains critical to a business’s success. Today, there are a variety of online tools which help you assess the various loan products available online and make an informed decision regarding a new business loan. Also, by selecting the right financial partner, you can grow your business exponentially.

Visit our website www.lendingkart.com for a quick unsecured working capital loan quote.