Gold loan for a startup? A way to finance your business

The booming startup ecosystem of India proves that young businesses can flourish exponentially with the right combination of talent, hard work, and financial support. Finance is an essential tool for running any business. But not every startup receives crores of funding. These startups with equally great ideas and innovation often fail to survive beyond their first year. Reason? Lack of liquidity.

This situation leads to startup founders moving the focus from running the business to raising funds which are time-consuming and demotivating. Often, startups with potential consumer interests fail because their cash reserves are insufficient to fulfil the orders.

Loans are the most popular solution for raising funds. They can help in establishing, expanding, and even sustaining a business. However, sanctioning a loan requires patience, credit history, and documentation. The lengthy process is often tiring and demotivating for business owners.

Fortunately, applying for a gold loan is the easiest and one of the most practical solutions to address the cash crunch problem. Let’s learn more about a gold loan for business.

What is a gold loan?
A gold loan provides the necessary funds to a borrower against gold items. The loan amount is a specific percentage of the total gold value offered as collateral. Taking a gold loan for a company is ideal for many business owners. These business owners are aware of and use the provisions and benefits of gold loans. Here are some reasons and benefits of taking a gold loan for business.

Why acquire a gold loan to finance your business?
1. Minimum documentation
Getting a gold loan is one of the most hassle-free ways to raise funds. For address proof and identity proof, KYC documents are enough. No other certificate or collateral is required. This discount in documentation is due to the gold, which is the collateral against the loan amount.

A major element otherwise crucial for loans, credit score, is not required for getting a gold loan. Business owners with a lower CIBIL score are also eligible for a gold loan. This way, gold loans take away the tiresome documentation process and help businesses to focus on growth.

2. Rapid approval and disbursement
During any business’s financial emergency, staying afloat is crucial. The prolonged loan approval process does not make the situation any better. Acquiring a gold loan is significantly easy. A few lenders provide approval and  isbursal for a gold loan in 30 minutes. There are no specific criteria to avail of the gold loan.

Ideally, only purity and weight are the criteria to get the gold loan approved. The lender then evaluates, ensuring the authenticity of the gold.

Disclaimer: This article is a sponsored feature by IIFL. Money9 does not take any responsibility for the content and any profit or loss suffered by the readers. All readers are advised to consult an investment expert before making any investment decision.