How Gold Loans Is The New Way To Finance A Startup

Startups often needs large sum of money in a short amount of time. Get to know how gold loans can help startup businesses in the right direction!

23 Aug,2022 07:34 IST 243
How Gold Loans Is The New Way To Finance A Startup

Gold Loans have become one of the most widely used loan products in the Indian financial market. The reason for their high demand is the no-restriction rule on the end user and the flexible repayment options. It is a common myth that entrepreneurs can not use a loan against gold to raise capital for their businesses. On the contrary, it is an ideal product for entrepreneurs to raise immediate funds.

This blog will help you understand how to use a loan against gold to successfully finance your startup.

How Gold Loans Is The New Way To Finance A Startup: The Benefits

Startups may require huge funds to start business operations. An entrepreneur can avail of a gold loan to fulfill the capital requirement. Here are the benefits of taking a loan against gold for effective startup financing:

1. Immediate Funds

A loan against gold is the quickest loan product designed to offer immediate funds to the borrower. The application process is entirely digital and requires filling out a small application form and completing KYC. Once you submit the form, reputed lenders take less than 30 minutes to disburse the loan amount into your bank account.

2. No Credit Score

It becomes challenging for entrepreneurs with no prior financial history or a good credit score to secure capital from other types of loans. However, unlike other types of loans, gold loans do not require credit or a CIBIL score to be eligible for a loan against gold. All they need is physical gold to complete the process of the gold pledge.

3. More Control

If not for loan products like loans against gold, entrepreneurs have to sell a stake in their startup to other investors to raise funds. This path forces them to lose a part of their startups, resulting in lesser control over the business operations. A loan against gold allows them to raise adequate funding without giving up control of their business to external investors.
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4. Regular Cash Flow

A positive cash flow is one of the most vital aspects of ensuring business sustainability. Negative economic factors such as inflation or recession can force a business to have inadequate funds to pay rent, hire new employees or buy inventory. Utilizing a loan against gold helps such entrepreneurs have a regular cash flow to pay for such costs and ensure the business’s survival.

5. No External Collateral

Unlike other types of loans which require pledging an asset such as real estate as collateral, gold loans need only gold to secure the loan amount. Since the physical gold is already dormant in bank lockers, entrepreneurs can utilize the physical gold to fulfil the startup’s capital requirement without pledging an external asset as collateral.

6. Nominal Interest Rates

Gold loans have attractive and affordable interest rates. They do not include unnecessary or hidden costs. The nominal gold loan interest rates ensure that the borrower can pay the amount without creating a future financial burden because of the loan repayment liability.

Avail Of A Loan Against Gold For Your Startup With IIFL Finance

IIFL Finance is India’s leading financial services provider that has designed several loan products for budding entrepreneurs to ensure their startup is successful. The proprietary loan against gold for startups offers instant funds up to Rs 30 lakh with a quick disbursal process.

The loan repayment structure is flexible and offers multiple repayment modes, including standing instructions, NEFT Mandate, ECS, Net-banking, UPI, etc. You can apply for the loan online or offline by visiting IIFL Finance nearest branch.

FAQs

Q.1: What documents are required for IIFL Finance loan against gold?
Ans: Documents required for gold loan are Aadhar Card, PAN Card, Driving License, Passport, Ration Card, Electricity Bill, etc. T

Q.2: Is the pledged gold kept safe during the loan tenure?
Ans: Yes, IIFL Finance keeps the pledged gold utmost safe in steel-hardened safety vaults with 24/7 security surveillance. Furthermore, the pledged gold is backed by insurance to reimburse the borrower in case of theft.

Q.3: What are the benefits of IIFL finance startup loan against gold?
Ans:
• Instant loan amount up to Rs 30 lakh
• An easy and online application process
• Instant credit of loan amount to your bank account
• Affordable EMI repayment options

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Disclaimer: The information contained in this post is for general information purposes only. IIFL Finance Limited (including its associates and affiliates) ("the Company") assumes no liability or responsibility for any errors or omissions in the contents of this post and under no circumstances shall the Company be liable for any damage, loss, injury or disappointment etc. suffered by any reader. All information in this post is provided "as is", with no guarantee of completeness, accuracy, timeliness or of the results etc. obtained from the use of this information, and without warranty of any kind, express or implied, including, but not limited to warranties of performance, merchantability and fitness for a particular purpose. Given the changing nature of laws, rules and regulations, there may be delays, omissions or inaccuracies in the information contained in this post. The information on this post is provided with the understanding that the Company is not herein engaged in rendering legal, accounting, tax, or other professional advice and services. As such, it should not be used as a substitute for consultation with professional accounting, tax, legal or other competent advisers. This post may contain views and opinions which are those of the authors and do not necessarily reflect the official policy or position of any other agency or organization. This post may also contain links to external websites that are not provided or maintained by or in any way affiliated with the Company and the Company does not guarantee the accuracy, relevance, timeliness, or completeness of any information on these external websites. Any/ all (Gold/ Personal/ Business) loan product specifications and information that maybe stated in this post are subject to change from time to time, readers are advised to reach out to the Company for current specifications of the said (Gold/ Personal/ Business) loan.

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