How To Use A CA Loan To Strengthen Your Practice
Chartered accountants combine the skill of strategic decision-making with a deep understanding of personal and corporate finances. Depending on your specialisation, you may be an expert in matters such as tax, mergers and acquisitions, or valuation. Why not use your skill to choose the right source of finance for growing your practice? The easiest way to finance your business is through a customised loan for chartered accountants.
Here’s how you can best use a CA loan:
1. Finance Your Organisation’s Working Capital Needs
Being a chartered accountant you must be aware of the importance of balancing your current assets and current liabilities.
a. Paying day-to-day expenses: Working capital is essential for daily business operations as it is used to pay salaries and other overhead costs and repay debts.
b. Managing a negative working capital: When working capital is insufficient, your practice may falter. A CA loan helps finance the unpredictable working capital needs of your business and keep your firm running smoothly.
c. Expanding client base: Working capital is especially useful if you are planning to take on new clients or expand, which is bound to increase your everyday cost of operations.
2. Finance Growth And Expansion
Whether big or small, the growth of every business requires substantial finance. A CA loan helps you finance the expansion of your business by giving you credit up to Rs.30 lakh. The loan has a flexible tenor that you can choose based on the timeframe of your expansion or your projected monthly revenues. This allows you to go about paying EMIs conveniently.
3. Finance Assets
Assets are an important investment for any practice. Not only do they boost your productivity, they are also a good way to invest your money. A loan for chartered accountants can help you buy new assets like commercial space/premises or property, company vehicles or computers and laptops—all of which involve investment. These can be later sold to cover the expenses of the loan or to meet cash flow deficits.
4. Repay Debts On Time
Maintaining a good creditor relationship: Debts can keep piling up if not paid on time. Defaulting on payments has repercussions such as seizure of business assets as well as a lower credit score. A loan for chartered accountants allows you to repay your creditors on time. This maintains a positive image with your creditors and a good business relationship as well.
Limiting your long-term liabilities: The loan itself has a flexible term of repayment that doesn’t make it a liability for you or your practice.
5. Resolve Unanticipated Cash Needs With A Line Of Credit
A line of credit is ideal to meet unexpected needs for cash. Within your chosen tenor, you are free to borrow as much as you need from within this amount, as many times as you require. You only pay interest on the sum you have borrowed, saving you from paying interest on the whole amount sanctioned. Further, your EMIs comprise only your interest payments; and, you can pay off the principal at the end of the tenor. This helps you manage your cash flow more easily.
A line of credit is especially useful in financing working capital or in expanding your practice—where you don’t always know how much money you need in advance.
6. Furnish And Design A New Office
Setting up a new office has several expenses associated with it. Typically, you will have to spend on-
- Painting and interior decoration
- Furniture, fittings and carpentry.
- Electrical work
- Miscellaneous accessories such as carpets and curtains
Instead of dipping into your business’ finances or personal savings, you can use a CA loan to furnish your office. These savings can be invested elsewhere or reserved for exigencies.
These are some of the primary ways in which you can use a CA loan to meet your practice’s financial needs. A reliable lender for a Loan for Chartered Accountants is Bajaj Finserv. They customise the loan to your exact specifications, making it convenient as well as cost-effective. The loan offers benefits like a line of credit and nominal interest rate and offer you a zero-collateral loan.