Functions of a Travel Agency:The primary clients of travel agencies are business travellers and leisure travelers. Their requirements are vastly different, and the travel agency has to procure the necessary components from different suppliers to cater to the individual needs of its clients. The primary function of a travel agency is in selling the following:
- Lodging and accommodation
- Facilitating Entertainment avenues for individuals and groups
- Planning trips and itineraries
- Sundry travel arrangements.
Linkages of a Travel Agency:To cater to the specific demands of its clients, the travel agency needs to closely associate and integrate with the service providers in each sphere that is related to travel and tourism as under:
Car rental services
Travel and Trips
Trade and Tourist Associations
Tour operators both domestic and foreign
Tourism Educational Institutes
Agencies related to travel and tourism both in the government and Private sector
Financials of a Travel Agency:The multitasking activity of a Travel Agency requires meticulous planning and finance to run like any other business. It has to further comply with all the rules and regulations framed by the GOI with several registrations at the government level and the suppliers, especially the airlines and the railways. It further has to register for GST as the services provided by the agency is within its ambit. The travel agency financial plan includes:
- Office set up and infrastructure
- Working capital
- Online booking facilities
- Salaries for the employees
- Credit to the clients
- Bulk booking of services.
Type business loan for travel agency in India:There is business loan galore with the lenders waiting to offer travel agency financing with the following products that typically suits the business environment and the needs of a travel agency.
Term Loan for Travel Agency:As the name suggests, a term loan is designed to meet the one-time capital need. The fund may be used to:
- Set up or expand the office and operations
- Technology upgrade or new equipment
- Add to inventories
- Grow your team
- Publicity etc.
Features of Term Business Loan
Up to Rs.2C
1 year to 3 years
Rate of Interest
Up to 2% per month depending on your credit profile
One time processing fee
Usually nil collateral
Usually specified operational history varying with lenders
Line of Credit for Travel Agency:
It is an overdraft facility which endows you with a lot of flexibility with relation to your cash flow, which can change with the season.
Features of Line of Credit Business Loan
All the features are similar to the Term Loan except that you pay interest only on to the extent of funds used. You are free to deposit and withdraw to meet your financial needs.
The overdraft facility is reviewed periodically
Invoice Discounting for Travel Agency:It acts as an alternative to traditional business loans by providing instant funds against locked up invoices, ensuring that there is steady cash flow. The salient features of this credit product are:
- Get Instant cash
- Repay when your client pays.
Working of Invoice Discounting:
- The invoice is raised on the client
- The lender pays up to 90% of the value of the invoice
- Liquidate when you receive payment from your client.