Business Term Loans: Transforming and Driving Growth

 

Business Term Loans

Over the past decade, Indian businesses across industries and scales have evolved at a remarkable pace. From mid-sized enterprises expanding into global markets to large manufacturers modernizing their supply chains, capital remains the single most critical lever for sustainable growth. Therefore, when it comes to structured funding with clarity on tenure and repayment, Business Term Loans have emerged as the preferred financing instrument.

Whether your business is planning capacity expansion, technological upgrades, infrastructure development, or even managing cash flow, term loans offer a dependable and customizable funding option. So, what exactly are Business Term Loans, and how can they power your next phase of growth?

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What Is a Business Term Loan?

At its core, a Business Term Loan is a debt facility extended to businesses for a fixed period ranging from a few months to several years with clearly defined repayment schedules. These loans are disbursed as a lump sum and are often used for purposes such as:

• Asset acquisition (machinery, intellectual property, equipment)

• Business expansion or diversification

• Working capital augmentation

• Debt consolidation or refinancing

• Technology upgrades

Unlike revolving credit facilities, term loans are structured with fixed interest rates or floating rates, along with consistent EMIs, helping businesses plan finances with precision.

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The Two Pillars: Short-Term vs Long-Term Business Loans

While both short-term and long-term business loans fall under the term loan umbrella, they serve distinct business needs and life cycles.

1. Short-Term Business Loans

Tenure Typically 12–24 months.
 

These loans are ideal for managing seasonal demand spikes, short-term operational costs, or bridging temporary cash flow mismatches. Companies in sectors like retail, logistics, trading, or FMCG often turn to short-term loans to remain agile.

Example Use Case: 

A garment exporter receiving a large order may need short-term capital to purchase raw materials and cover wage bills until export proceeds are realized.

Long-Term Business Loans

Tenure Ranges from 3 years to 15+ years.

Designed for capital-intensive goals like factory construction, real estate acquisition, or major equipment installation. Long-term loans offer structured repayment options aligned with the lifecycle of the asset or project.

Example Use Case: 

A manufacturing company investing in a new plant setup can avail a long-term loan to finance infrastructure, power supply, and advanced machinery installation.

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Why Business Term Loans Are Gaining Traction

Across industries, be it pharmaceuticals, infrastructure, IT services, automotive, or textile manufacturing, the preference for term loans is growing, and rightly so. Key advantages include:

• Helps in disciplined cash flow planning

• Funds can be tailored to diverse business needs

• Unsecured term loans are available for eligible borrowers

• Based on the scale and urgency of funding

Most importantly, they help businesses retain ownership while still accessing the funds needed for transformation and scaling.

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Industry Demand: Who Needs Business Term Loans?

Capital is the catalyst for operational continuity and strategic acceleration. That’s not just a philosophy, it’s a reality for sectors including:

• Hospitals and diagnostic centres are upgrading to cutting-edge tech

• Educational institutions are investing in hybrid classrooms and digital tools

• Renewable Energy: Solar power firms scaling operations in new geographies

• Agri-Tech & Food Processing: Cold storage, logistics, and farm automation

• Manufacturing Automation, compliance, and export-readiness initiatives
  
  

Each of these sectors requires timely and appropriately structured term loans to stay ahead of competition, adapt to policy changes, and respond to market demand.

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The Terkar Capital Advantage

Terkar Capital understands that every business has unique funding requirements. Therefore, with our deep domain expertise and access to a wide network of lenders, we offer end-to-end advisory services, from documentation to disbursal. Additionally, we provide tailored funding solutions structured to align with your specific business model and goals. 

Furthermore, we ensure fast turnaround times, recognising that timing can be crucial for business success. Finally, we offer both collateral and non-collateral options, ensuring accessibility for businesses of all sizes. Whether you're a startup, a conglomerate, or a legacy business, Terkar Capital can craft solutions that align your capital with your ambition.

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In Conclusion

Business Term Loans are not merely borrowed capital; they are strategic tools that, when structured correctly, can expand a business's capacity, empower innovation, and strengthen its competitiveness.

Further, as economic cycles fluctuate and business challenges evolve, having a dependable financial partner like Terkar Capital can be invaluable. From short-term liquidity support to long-term expansion planning, we help businesses secure capital with clarity, confidence, and credibility.

Myths About Debt Funding

Debt Funding

For starting, expanding, or running a business, funds are of prime importance. These funds can be raised in two ways, debt and equity funding. Equity Funding is raising finances by selling the shares of a company. Moreover, debt financing occurs when a company borrows money to be paid back at a future date with interest. This is available in both secured and unsecured funding. The funds can be sourced through Banks, NBFCs, or Financial Institutions.

But there are certain myths and misconceptions associated with how to obtain debt funding. Below are a few of them:

1. Funding requires high collateral

Traditionally, the debt instruments used to come up with collateral, but now it can be availed even without collateral. The collateral-free loans may have more interest rates as compared to secured ones. In the case of secured funding, the amount of collateral and the amount of loan should match. Whereas, in the case of unsecured loans, the funds are even disbursed based on the credit score of the borrower and his relationship with his banker.

2. The process of funding takes a longer time

The funding procedure depends upon various factors. The lender has to submit a variety of documents like KYC, financials, and specific documents. Even though the process looks lengthy, we arrange it as fast and quickly as possible. Now the clients do not have to wait for months for disbursement, it can be done in merely days.

3. Only the lower amount is financed

The clients now can avail a higher number of finances too. The only restriction is eligibility. Once the client has a creditworthy score and fits into the eligibility criteria, the higher amounts can also be availed through both secured and unsecured ways. 

4. The ROI is high in case of unsecured funding

The ROI majorly depends upon the availability of collateral, CIBIL score, and other economic criteria. The higher the ROI, the greater will be the risk, and the lower the ROI, the lesser will be the risk. Hence, the ROI totally depends and changes from case to case.

5. Debt funding come up with heavy risk

The loans used to be risky earlier, but today if you are doing it with the right lender, then there is no need to worry. We at Terkar Capital help to bridge the gap between eligible borrowers and capable lenders. We understand the needs and requirements of the clients and work accordingly with arranging quality and transparent procedures which vanishes the risk in funding.

6. Fewer products available in debt funding

This is not the truth, as there are several debt products available in the market that one can opt for and avail of services. There are conventional as well as non-conventional debt funding options. The products are chosen depending upon the financials and credit score of the clients.

7. No flexibility in funding

The debt funding has flexible options to carry out. Also, many services provide smooth repayment options which makes the funding work hassle-free.

8. You cannot use mortgaged property or assets.

Most borrowers worry about whether they can or cannot use the mortgaged property. Moreover, the property for a mortgage is either a residential or commercial one, which cannot be kept vacant or unused. As long as the borrower does not default on his or her loan payment EMIs, he or she can absolutely use the mortgaged property.

Why Choose Terkar Capital?

We at Terkar Capital understand the customer's needs, strengths, and weaknesses and with respect to the edges, we arrange the best funding solutions. Our trained executives will assist you in the entire procedure while applying for loans. Even after the disbursement of the loan, if the client faces any issues, we are available to help until the end of the tenure of the loan. We have expertise in the analysis of the market and offer a reasonable ROI to borrowers. Apply now at ease!

 

How to qualify for a business loan in India?

 

FAQs to qualify for a business loan in India

Business loans are loans taken by businesses or corporations without collateral. These loans are convenient for businesses to manage emergency monetary requirements. The procedure to get Business Loans in India is easier and quicker. Thus your loan will be sanctioned faster. Here are some frequently asked questions by our customers:

What are Business Loans?

Businesses today face several challenges. One of those challenges is the requirement of collateral for getting a loan from financial institutions. Many small and medium-scale businesses today do not have collateral for loans. These businesses can take a Business Loan. An unsecured business loan is given solely upon the creditworthiness of the businessman borrower. To be eligible for an unsecured business loan, the borrower should have a good credit rating, a good credit history, and a good cash flow.

Why should you take a Business Loan?

• Helps your business grow at a faster pace

By taking a business loan your business can grow at a faster rate. You can also finish any stagnant projects or ventures with the help of a business loan.

• The value of the loan is not dependent on the collateral

When applying for a secured loan, the amount of the loan is dependent on the collateral being used. But while taking an unsecured loan, you may get a bigger amount of money because the lender is making decisions on the basis of your cash flow, credit profile, the health of your business, and so on.

• Faster Disbursement of Loans

As a business loan does not require collateral, the disbursement of the business loan is faster. The financial institution checks your documentation, proposal, and track record and then sanctions the loan. Less paperwork is required for unsecured business loans.

• Repayment in EMI

You can repay the business loan in the form of EMIs. The interest rate will be applied to the EMIs over the term of the loan.

• No risk to your assets

An unsecured business loan is a loan where no collateral is necessary. Thus, all your assets are safeguarded from any risks.

Eligibility Criteria for Business Loans

The Eligibility criteria for a business loan may differ depending on various financial institutions and the situation of the business. Here is a list of the general eligibility criteria for a business loan:

1. The business must have its previous year’s financials duly audited by a CA.
2. Borrowers must have a good credit rating in order to qualify for an unsecured business loan.
3. The business should have a vintage of at least 2 years.
4. The business needs to have its Income Tax returns filed for at least the past 1 year

How do you get a Business Loan in India?

Business Loans can be defined as loans given to businesses and corporations against any kind of collateral. It is one of the most convenient financial products for businesses to manage the emergency conditions of the business.

• Assessing the requirements of the client

We at Terkar Capital will first understand the requirements of the client. We will also talk to the client about the future of their business, their plans to expand, restructure so on, and so forth. After assessing the requirements of the client, we will make an application for the business loan.

• Application and Documentation

Many business people have experienced the tedious nature of the documentation that needs to be done for the bank loan process. We at Terkar Capital take care of the documentation. We understand what stakeholders require to disburse the loan to our clients.

Once we receive the required documents we analyze the financials of the company and choose the financial institutions that best suit the client's requirements. This helps to avoid unnecessary inquiries to cibil and mess up while raising the finance.

 

Get your loan

After your proposal and documentation have been reviewed by the financial institution, your loan will be sanctioned. During the process, whenever the financial institution is in need of any clarification or any documentation we arrange for them. Our association with the client doesn't stop with the disbursement of the amount, rather it starts. We make sure the client should not have any problems while dealing with the respective financial institutions during the loan tenure.

 
What are the Documents Required for Business Loans?

Business loans are one of the most convenient types of loans for growing businesses. The documents required for Business Loans differ from one financial institution to another and as per the constitutions of the business. Reach out to us for documents usually required for a Business Loan.

CGTMSE scheme FAQs

 

FAQs on CGTMSE

The Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) is a trust inaugurated by the Ministry of Micro, Small and Medium Enterprises, the Government of India, and the Small Industries Development Bank of India (SIDBI). Launched on 30 August 2000, the main purpose of the CGTMSE scheme is to provide credit guarantees to financial institutions that grant loans to SMEs and Memes.

What is CGTMSE Meaning?

The basic purpose of CGTMSE is to encourage first-time entrepreneurs to build SMEs and MEME, estimated to support the Indian economy by availing of collateral-free loans from qualified financial institutions. The guarantee includes default by the borrower to repay the advance. Thus, the CGTMSE scheme essentially considers the requirement of loans to first-generation administrators so that they can flourish in a competitive environment without the burden of security or third-party guarantees. In turn, the financial institutions are given cover for the lack of security to fund SMEs and Memes promoted by small Indian businessmen up to a certain limit.

CGTMSE – A Driving Force for MSMEs

What are CGTMSE Fees?

The fees charged by the trust fund are 1% p.a of the amount so approved:

1. 0.75% – for loans of up to Rs. 5 Lac

2. 0.85% for loans above Rs. 5 Lac but up to Rs. 100 Lac.

The credit guarantee available below this scheme is 75/80% of the amount so transmitted to a maximum cap of Rs. 62.5 Lac / 65 Lac for a loan facility of up to Rs. 50 Lac. The percentage guarantee implies 85% for micro-enterprises for a sum of up to Rs. 5 Lac. The percentage of guarantee is 50% of the amount so approved for a credit of above Rs. 50 Lac with a maximum limit of Rs. 100 Lac. The ownership of the guarantee is a block of 5 years.

Does CGTMSE cover retail trade?

CGTMSE Coverage extended to Retail Trade & Collateral Loans too – Now Retail Trades & partial collateral loans may be included under the Credit Guarantee Scheme of CGTMSE. A decision in this opinion was taken under “Rebooting CGTMSE” established by the Ministry of MSME and CGTMSE on February 20, 2018.

 Following modifications were suggested for implementation:

1. Charging Annual Guarantee Fees (AGF) on Outstanding Loan Amount somewhat than the sanctioned amount.

2. Extending the Coverage of the Credit Guarantee Scheme (CGS) to cover the MSE Retail Traders section.

3. Providing loans with Partial Collateral Security “Hybrid Security” under Credit Guarantee Scheme.  

4. Increase in the extent of guarantee coverage to 75% from the existing 50% for proposals above ₹50 Lac.

5. Intensifying the IT infrastructure of the Trust to develop operational efficiencies and reduce the turnaround time for claim settlement.  

6. Augmentation of the corpus of the Trust from Rs. 2,500 crore to Rs. 7,500 crore

7. To increase coverage of the loans covered under the credit guarantee scheme from Rs. 1 crore to Rs. 2 crore

8. To increase coverage of the credit guarantee scheme for loans being enlarged to micro and small enterprises by NBFCs also.

Understand CGTMSE scheme execution.

What is CGTMSE Loan Interest Rate?

All lenders impose a particular cost on the borrower. The important part of the cost to the borrower is the interest rate for the loan. The majority of the lenders recover the CGTMSE loan interest rate that does not exceed 14% PA including the guarantee cover. Most of the time the rate of interest varies as per change in the financial institutions and the facility which is available under CGTMSE.

What is CGTMSE Full form?

The full form of CGTMSE is Credit Guarantee Fund Trust for Micro and Small Enterprises which gives funding to financial institutions to help SMEs and MSMEs.

How to apply for the CGTMSE Scheme?

To apply for a CGTMSE loan, you are required to set up a business plan including business model, projected goal, etc., and obtain certain business documents if you have just registered your business. Once you have all the essential documents and business plans prepared by a professional, you can apply for the loan with eligible moneylenders. They will analyze your business model and application. If the bank is satisfied, it will process the request to CGTMSE for getting a guarantee cover and confirm the loan amount after CGTMSE approves your application and you pay CGTMSE loan fees.

It reaches out even to the rural areas. The application can be made particularly if the applicant is eligible for a loan under the CGTMSE scheme.

How does Terkar Capital help in getting CGTMSE Exposure?

For many years Terkar Capital has worked extensively and exclusively for raising the finances for the businesses. With respect to the company and its financials, we arrange the source of the funding for the company. And CGTMSE loan is among them. There are many financial facts, and figures that need to be considered before one shall proceed on the CGTMSE. We analyze the financials, and business and arrange the whole execution with the best suits facility under CGTMSE.