The most useful type of loan for small-business owners is the line-of-credit loan. In fact, it’s probably the one permanent loan arrangement every business owner should have with their banker since it protects the business from emergencies and stalled cash flow. Line-of-credit loans are intended for purchases of inventory and payment of operating costs for working capital and business cycle needs. They're not intended for purchases of equipment or real estate.

A line-of-credit loan is a short-term loan that extends the cash available in your business’s checking account to the upper limit of the loan contract. Every bank has its own method of funding, but, essentially, an amount is transferred to the business’s checking account to cover checks. The business pays interest on the actual amount advanced, from the time it's advanced until it's paid back.

Line-of-credit loans usually carry the lowest interest rate an offer since they're seen as fairly low-risk. It even includes a clause that gives them the right to cancel the loan if they think your business is in jeopardy. Interest payments are made monthly, and the principal is paid off at your convenience, though it's wise to make payments on the principal often.

Most line-of-credit loans are written for periods of one year and may be renewed almost automatically for an annual fee. KUSCCOOP require that your credit line be fully paid off for seven to 30 days each contract year. This period is probably the best time to negotiate. Even if you don’t need a line-of-credit loan now, talk to your KUSCCOOP about how to get one. To negotiate a credit line, your KUSCCOOP will want to see current financial statements, the latest tax returns, and a projected cash-flow statement.  

Loan Size

• NPR 1,00,000 (One Lakh) to NPR  1,00,00,000 (One Crore)

Interest Rate

• 15.99% -16%

Loan Tenure

• 1 Years

Terms & Condition for Repayment of Loan

• You pay interest on the amount you use, not the entire credit limit as you do with a personal loan. No matter how much you borrow, all of it plus interest must be repaid by the end of the term.

Security

• Collateral

Insurance

• Accidental insurance

Fees and Charges

• Service Charge 1%

Requirement Documents

• Age: 22 Years to 65 Years
• Business Documents
• Citizenship