Advantages of NBFCs
1. Minimal Documentation: NBFCs have smoothened the loan and advance mechanism, as they are making efforts to create a loaning facility paperless, as of now they have minimised the documentation requirements and are also offering paperless and zero documentation loan offers.
2. Competitive Interest Rates: NBFC offers lower interest rates for a business loan in some conditions, and their competitive rates in the financial sector attract the borrowers to lend money from them rather than going through the route of banks. Also, loan processing and other file charges are also low and sometimes they also waive these charges.
3. Easy Eligibility Criteria: This is the most important and unique advantage of choosing an NBFC. Banks usually have strict lending criteria for providing business loans, they even follow priority criteria. They follow a long and tough verification process and lots of documentation for approving business loan applications.
4. Quick Fund Disbursal: NBFCs follow less stringent lending terms. They have relaxed eligibility criteria and they have minimised documentation. Hence, their business loans are disbursed more quickly, which allows businesses to get quick funding when they need it the most.
5. Pre-Approved Loan Limit: NBFCs provide business loans and personal loans with pre-approved loan limits. Businesses and individuals can withdraw funds from pre-approved loan limits as and when required. The best part about this offering is that interest will be charged only on the amount that is used by the business and not on the entire loan limit provided to them.