Soft loan or soft financing in India comes at a rate of interest, lower than current market rate. It is not only the most in-demand but also comes with concessions to the borrowers. The provision for long repayment period or interest holidays are other major factors behind the popularity. The government understands the crucial nature of the loan and ensures that this type of loan is offered solely to the projects that stand “worthwhile” in the eyes of government.
Having understood what a soft loan actually mean, it is now time to look at some of the benefits of Soft Loan in India:
- Low rate of interest is a major advantage of soft loan. For large scale business loan in India, entrepreneurs are now making the big shift towards foreign options due to the low rate of interest.
- The global financial market witnesses new additions which is made possible by getting associated with a foreign entity.
- Larger funding market makes it possible to satisfy and address the large requirements.
- Soft loan doesn’t dilute the stake in the company, since, it is just a loan.
- Company is not required to offer the voting rights to the funding investor.
- The borrower stands in a position to diversify the base with soft loan.
- The profitability of the companies as well as the economic growth witnesses a rise.
Apply for soft loan – the government of India has allowed companies based in India to borrow funds from foreign shareholders. In order to obtain the loan you must fulfill some of the major guidelines and also apply with the RBI. After obtaining a legal approval the Indian company makes it to the allowed list. The RBI then takes the route of evaluation. Each document, every detail is scrutinized and tested for truth in all forms. After satisfactory completion of evaluation, the business is eligible for soft loan.
Are you an Indian firm seeking Soft loans at a low rate of interest? Then we at FDI India, your FDI facilitators can definitely guide you in the best way possible. Strategic transactions, finding the right investor, and helping with the financial structure are some of the major aspects that we ensure to offer you. Get in touch, to know more on how we can help you.