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10 Useful Business Tips for Young Entrepreneurs in India

  • 12-May-2022
10 Useful Business Tips for Young Entrepreneurs in India

For many young entrepreneurs, the dream job is to have their own business. Shortage of funds and lack of experience are the two roadblocks that stop you from making your dream a reality. 

To be successful, it is important to learn from those who have already attained their goals. Having an adviser is a blessing to a businessperson.  

If you haven’t found your business adviser to help you in starting a new business, here are some business tips for young entrepreneurs. 

1.Challenge yourself 

The great motivation is to keep challenging yourself. It can be tempting to live your life staying in your comfort zone. Treat your life as a long university, so that you can learn more and more every day and achieve your goals by challenging yourself. 

If you find yourself expecting to see a change in your life, set an ambition for your own.  

Once you have set your aim, put them on your to-do list and organize it into functional steps. 

 

2. Do work that you love 

There is no doubt that starting a business takes a lot of time. The only thing to be self-satisfied is to do work that you honestly believe in and are passionate about your goal. 

 

3. Take the risk 

Taking risks in business is usual but knowing the factors that impact decision making is important. Risks are an essential part of being an entrepreneur. You might have risk in some of your personal money when running a new business. 

Initially, you do not know the end result of your efforts unless you do it. 

If you failed once, try to do it again because when you achieve success, you will not regret trying again. 

 

4. Know your audience 

Knowing your audience is very important. There are some factors that help you to understand your audience better are: - 

  • Do research about their background, education, preference for business communication, etc.
  • Analyze your competitors that target the audience as same as yours, their branding, how is it effective? It will help your audience to gain an advantage from this research.
  • Invest extra time at a meeting in getting to know the applicant better. Use their details to indicate that you actually listened to them.

 

5. Believe in yourself 

One of the biggest faults that entrepreneurs make is not having faith in themselves. Given below are some factors to have believe in yourself and look confident: 

  • Improve your self-talk
  • Think of past success
  • Live in the present
  • Positive visualization
  • Inner strength

 

6. Build a strong network 

It is important to know the value and experience that anybody can provide for startup, from your co-worker to your peers.  

Get an advantage of all scope of networking that is accessible to you including industry talks, networking events, internships, etc. 

Being in touch with colleagues at a casual level may lead to a professional working relationship. 

 

7. Surround yourself with experts 

It is important to keep yourself encircled in every aspect of the business. Although, if you want to enlarge your business focus on that. Mentorship is also crucial. Even though you are the CEO, you can continue to seek an opportunity to learn.  

 

8. Built a great team 

Without a team, it is impossible to succeed in a business and those who try to achieve heights in a business alone will sometimes lose. Therefore, build your own team to boost your success.  

 

9. Social media promotes your business 

Social media helps you to promote your business, but you should know how to use it productively. It is an amazing tool for promotion, but one must need to know about its advantages and disadvantages.

 

10.  Create a domain for business 

A business domain is the name of the website that can be found at the URL. It is the easiest way for the individual to locate your website and analyze your brand with its domain name. 

 

Business loan offered by the government of India 

Whether you want to start a new business or expand the existing business, you always require a constant cash flow. 

Capital is a significant requirement for any type of business that ranges from small to large, every business faces a shortage of funds at certain a level for the development of a business. 

In some cases, the individual turns their savings into investments. Moreover, many enterprises are left with an alternative option of a business loan. 

In recent years, the government of India inaugurated many steps to ease the process of loan such as minimum documentation, collateral-free loans, online application, etc. 

Business loan in India is provided by various banks, financial institutions, or Non-Banking Financial Institutions (NBFCs) to fulfill the need of daily business requirements.   

                                                                      @contentImg

 

The government of India also provides many credit schemes under business loans for the MSME sector. Some of them are - 

  • Pradhan Mantri Mudra Yojana (PMMY)
  • National Small Industries Corporation (NSIC)
  • Credit Linked Capital Subsidy Scheme (CLCSS)
  • MSME loan in 59 minutes
  • Credit Guarantee Fund Scheme for Micro and Small Enterprises

However, Business loans are classified into two categories i.e., secured loan and unsecured loan.

 

Secured business loan 

A secured business loan is a type of debt where the individual pledge their immovable property to avail required funds. 

The loan amount provided to the individual is based on the value of collateral or security. 

The individual can get a lower interest rate with a flexible repayment schedule as the individual has given their property as collateral or security and the bank can have the benefit of lower risk. 

There are many banks and financial institutions that will sanction the ownership deed of collateral until the borrowed amount is paid back. 

 

Types of secured loans 

There are various types of secured business loan given below: -  

  • Loan against property
  • Working capital loan
  • LC Discounting
  • Home construction loan
  • Bank overdraft
  • Loan against rent receivable
  • Industrial property loan
  • Business loan
  • Bank guarantee
  • Commercial property loan
  • Letter of credit
  • NRI Home loan, etc...

 

Top banks that provide secured loans 

Bank name Loan against property Business loan  
State Bank of India 8.45% 11.10% 
IDFC First Bank  7.50% 18.00% 
Axis Bank  7.50% 18.00% 
Yes Bank Ltd. 8.00% 18.00% 
ICICI Bank 8.50% 17.00% 
Tata Capital Financial Services Limited 10.00% 19.00% 

 

Key features of secured loan 

  • A secured loan can be avail for a high loan amount.

 

  • There is quick approval for the loan.

 

  • It can be provided to self-employed individuals, salaried, and non-salaried.

 

  • No need for a guarantor for such loan.

 

  • Choice of the flexible repayment period.

 

  • Loans are provided against the assets which will be utilized as security such as property, vehicles, assets, home, etc.

 

  • Option of fixed and variable rates.

 

  • It has a lower rate, as the banks have faith in the capability of the individual to pay it back.

 

Advantages and Disadvantages of secured loan 

Advantages  Disadvantages  
The lender will give a high limit for borrowing that allows to acquire a large amount of loan. The longer repayment may result in paying higher interest over the loan schedule. 
A secured loan can be provided for longer repayment tenure. Floating rates can lead to paying higher EMIs. 
The individual should pay a low interest rate on the borrowed amount. Chances of losing security might occur if the individual failed to pay back the amount. 

 

Eligibility criteria of secured loan 

  • The age limit of the borrower should be a minimum of 18 years of age.

 

  • A few banks also offer loans to NREs, NRIs, and NROs.

 

  • The nationality of the individual should be the resident of India.

 

  • The loan can also be given to the Hindu Undivided Family (HUF) and farmers.

 

  • Many banks require the applicant to have an annual income of at least Rs. 3 lakhs per annum.

 

  • The individual should have assets that equalize or exceed the value of a loan.

 

Unsecured business loan 

An unsecured loan does not let individuals to pledge any collateral or security to avail the amount. Such loans are provided on the basis of income and creditworthiness. 

Such type of loan is provided on the basis of creditworthiness and income. An applicant with higher creditworthiness gets quick access to funds.  

The profile of an unsecured loan is considered to be riskier because the interest rate is higher than that of secured loans. 

On the basis of the financial condition of the borrower, the bank assess the repayment potential by evaluating his or her creditworthiness. 

 

Characteristics of unsecured loan 

  • It does not require any collateral to avail a loan.

 

  • The risk is less as compared to a secure loan.

 

  • It has a higher rate of interest

 

  • The loan is provided on the basis of credit and income.

 

  • Lower borrowing limits.

 

Advantages and Disadvantages of unsecured loan 

Advantages  Disadvantages  
Less risky for the applicants. There is less possibility to avail a loan if the credit score of the applicant is low. 
The process of such loan is faster than a secure loan. The rate of interest is higher than the secure loan. 
The loan is sanctioned on credit history and income.  Unsecured loans come with shorter repayment periods which increase the possibility of defaults on payments. 

 

Eligibility criteria for an unsecured loan 

  • The minimum age limit of the individual is 21 years, and the maximum is 60 years for salaried individuals. And for the self-employed, it ranges between 25 to 65 years of age.

 

  • CIBIL Score must be above 750.

 

  • The individual must be salaried or self-employed.

 

  • The business must be in continuation for the previous two years.

 

  • The nationality should be the resident of India.

 

Difference between secured & unsecured loan 

Particulars  Secured loan  Unsecured loan 
Default on loan  In case of a default, the applicant can lose their assets. In such loans, no collateral is required. Therefore, the applicant does not have a risk of losing assets in case of default.  
Rate of interest The interest rate for these loans is lower as compared to unsecured loans. Because of the high risk, the interest rates are higher. 
Collateral  Such loans require the borrower to pledge an asset as collateral. Borrowers do not require to pledge collateral to avail a loan. 
Loan tenure  The repayment period for a secure loan is longer. The repayment tenure for such loan is less as compared to a secured loan. 
Risk  The risk for such loans is lower than unsecured loans. The risk is higher in case of default as it does not keep collateral. 
Examples  Car loans, loan against property, home loans, etc... Personal loans, education loans, etc... 

 

Documents required for secured and unsecured loan 

  • 2 passport-sized photographs
  • Aadhar card
  • Passport
  • PAN Card copy
  • Permanent address proof and if rented
  • Income Tax Return with computation of income (if file) for the last 3 years
  • Sanction letter
  • Loan schedule
  • Bank statement of last 1 year (salary account)
  • A cheque for the processing fee
  • Appointment letter
  • Salary slips of the last 3 months
  • Complete property papers with ATS + MAP and Chain.

 

How to apply for a business loan via Financeseva? 

Financeseva allows you to choose and compare the best deal provided by the top banks and financial institutions for business loans. 

Step by step to apply online: -   

Step 1: - Visit the official website of the preferred lender and check your eligibility.  

  

Step 2: - With the help of using the EMI calculator, you can calculate your monthly EMI.  

  

Step 3: - After that, fill in an application form.  

  

Step 4: - Enter all the required information and select the needed loan amount and repayment tenure.  

  

Step 5: - After filling in the application form, click on the ‘submit’ button.  

  

Step 6: - After analyzing your application form, the bank representative will contact you for further formalities. 

 

Why to choose financeseva for a business loan? 

Financeseva will help you - 

  • In selecting the best deal based on your requirements
  • Provide doorstep service
  • Hassle-free loan process
  • Compare several lenders

Also read: - Difference Between Secured Loan vs Unsecured Loans

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