If you're a small business owner, you know that managing your finances is key to your success. You may also know that getting a traditional bank loan can be difficult, especially if your business is still in its early stages. That's where alternative lending options come in. One of the most popular types of alternative loans is a small business loan.
In a country like Pakistan, where the majority of the population is associated with some form of small business, it's no secret that obtaining a loan is essential for starting a venture. And while there are numerous avenues to explore when seeking a small business loan in Pakistan, not all of them are created equal.
In this blog post, we'll discuss the process to get a small business loan in Pakistan. So if you're ready to take your business up a notch, keep reading!
What is a Small Business Loan?
A small business loan is a type of financing that is issued to businesses that are typically classified as small businesses. These loans can be used for a variety of purposes, such as working capital, inventory, or expansion.
Unlike other types of loans, such as lines of credit or term loans, small business loans are typically not secured by collateral. This means that the small business owner does not have to put up any personal assets, such as their home or car, in order to qualify for the loan.
Instead, the lender relies on the small business owner's personal credit history and the financial strength of the business itself. Such loans can be a great way to finance your business's growth.
However, it is important to remember that these loans do come with some risks. If you are not able to make your payments on time, you could damage your personal credit score and put your business at risk of default.
As a result, it is important to carefully consider whether taking out a small business loan is the right choice for your business.
Why Do Businesses Need Small Business Loans?
There are a number of reasons why businesses might take out a small business loan in Pakistan.
- One common reason is to cover the cost of unexpected expenses. For example, if a company needs to make repairs to its premises or replace equipment that has broken down, a loan can help to cover the cost.
- Another reason businesses might take out loans is to invest in new opportunities. For example, a company might take out a loan to finance the opening of a new branch or the launch of a new product.
- Loans can also help businesses to manage cash flow and smooth out peaks and troughs in income.
Whatever the reason for taking out a business loan in Pakistan, it is essential to remember that loans need to be repaid with interest. Therefore, it is important to ensure that taking out a loan is the best option for your business before making any commitment.
It's no secret that starting your own business can be a costly endeavour. Between the cost of inventory, marketing, and office space, it's easy to rack up a large bill before you even open your doors.
However, if you're still apprehensive about getting a small business loan, starting your own business venture with zero initial investment is possible with Markaz's reselling platform.
By becoming a reseller at Markaz, you'll have access to Markaz's products at wholesale prices, meaning you can start selling without any upfront costs and earn money from the comfort of your own home.
How to Get a Small Business Loan in Pakistan
If you're thinking of starting a small business in Pakistan, one of the first things you'll need to do is apply for a small business loan. While this may seem like a daunting task, it's actually not as difficult as you might think. Here are a few tips to help you get started.
- Calculate the Required Amount
When you're ready to take your small business to the next level, a small business loan can be a helpful way to finance your expansion. But before you apply for a loan, it's important to calculate how much money you'll need. This will help you secure the right amount of financing and avoid taking out more debt than you can afford.
To calculate the amount you need, start by estimating the cost of your proposed expansion. Then, add in the cost of any new equipment or inventory you'll need to purchase. Finally, factor in the cost of any additional staff you'll need to hire to support your growth.
By taking the time to calculate your needs upfront, you'll be in a strong position to secure the financing you need to grow your small business. As the Markaz app is an online selling platform, you wouldn’t need any extra amount to start your business venture as we provide you with 10,000+ products that you can resell in your circle without any initial investment.
- Compare Different Lenders
If you're thinking about applying for a business loan scheme in Pakistan, you'll want to make sure you get the best possible terms. That means doing some research and comparing different lenders.
Look for lenders who offer competitive interest rates and favorable repayment terms. You should also consider the reputation of the lender and their customer service record. If you’re a woman, you can also look up a business loan scheme for women and see if it aligns with your requirements.
Once you've found a few potential lenders, take the time to fill out an application with each one. This will give you a better idea of what kind of loan you qualify for and how much it will cost you.
When you're ready to make a decision, choose the lender who offers the best terms for your needs.
- Keep the Documents Ready
Small business loans can be a great way to get the funding you need to start or grow your business. However, before you apply for a loan, it's important to make sure that you have all the required documents in order. This includes financial statements, business plans, and tax returns.
By having all of these documents ready, you'll be able to demonstrate to lenders that you're serious about your business and that you have a solid plan in place.
Additionally, having all of your paperwork in order will help the lending process go more smoothly and increase your chances of getting approved for the loan.
So if you're thinking about applying for a small business loan in Pakistan, take the time to gather all of the required documents first. It could make all the difference in whether or not you're approved for the loan.
- Choose the Right Repayment Structure
As a business owner, you have many options to choose from when it comes to financing your business.
- The most common repayment structure for term loans is the amortized loan. With this type of loan, you make equal monthly payments of principal and interest over the life of the loan.
- Microloans typically have a repayment period of six months to five years. The most common repayment structure for these loans is the balloon payment.
With this type of loan, you make smaller monthly payments until the end of the loan period.
- The Small Business Administration (SBA) loans take up to 10 years. With this type of loan, your payments start out low and increase gradually over time.
Talk to your lender about all the available options and compare their costs before making a decision.
- Submit the Application
When you're ready to apply, fill out the application completely and accurately. Incomplete or inaccurate applications can delay the approval process or even result in a rejection.
Don't forget to follow up with the lender after you submit your application. This shows that you're serious about getting the loan and committed to your business venture.
Can You Start a Business Venture Without Any Investment?
Have you ever wanted to start your own business, but didn't want to apply for a loan? Well, now there's a way you can start a business with no money down! The Markaz app is a reselling platform that enables resellers to start businesses with zero investment.
Here’s a list of reasons that make the Markaz app the best zero initial investment business venture in Pakistan.
- At Markaz, we manage your inventory, supply chain, delivery, and logistics as you focus on selling.
- We offer a wide range of 10,000+ products to boost your business.
- You can leverage your existing social network to start reselling.
- There’s currently no cap on the markup, so you can earn as much profit as you want to, but remember to be realistic.
- Our logistic partners have the lowest possible delivery charges i.e. PKR 90 per order.
In a world that is increasingly driven by technology, women who want to start their own businesses no longer have to rely on a business loan for women or male counterparts to get started.
With the Markaz app, women can get their businesses up and running quickly and easily, without any initial investment.
The app takes care of all the technical aspects of business, from marketing to accounting, so women can focus on what they do best: running their businesses.
So what are you waiting for? Download the Markaz app today and start your own business!