Business Banking

Whether you are starting a new venture or looking forward to move to next stage of growth in your existing one, financing is critical to business success. Finance for business typically falls under two categories – Equity and Debt. While equity requires convincing investors to provide finance in return for stake in business, debt implies borrowing money that has to be paid back over time, with interest. All commercial banks offer this facility of debt through their business banking services. These are in form of overdrafts, loans, business credit cards and commercial mortgages.

Business banking service in the form of overdraft is linked to current bank account. Overdrafts are devised to help manage short term borrowing needs. It is a working capital facility and can be an excellent way to recover short term cash flow fluctuations.

Business loan is the amount of money borrowed for an agreed period of time with an agreed schedule for repayment. The repayment is in form of instalments and the amount depends upon size of the loan, the period for which it is borrowed and the applicable rate of interest. For long term needs, loans are a better option than overdrafts.

Business banking services offered by some banks include the facility of business credit cards which work like personal credit cards, enabling business owners to pay for daily expenditure.

The commercial mortgage service can be availed to purchase commercial property such as shops, offices, factories or warehouses.

The source of finance best suited for a business depends on its nature of operations and market circumstances.