Difference Between A Flexi Business Loan And A Business Term Loan

Whether you plan to launch a new business or to increase working capital or to expand your old business, it is important to know the difference between business loan types. This will help you draw maximum benefit, with no worry.

Business Term Loan

This is a traditional loan, consisting of a fixed lump sum amount and EMI structure. Interest is charged on the entire loan amount which is paid as EMI. In this case, the EMI amount is calculated as a combination of principal amount + interest amount.

Basically a term loan,

Offers a fixed lump sum loan amount
Interest is chargeable on the entire principal amount
EMI is calculated as interest + principal amount as EMI

Flexi Business Loan

It allows you to save on your EMIs by firstly, letting you withdraw what you need, and secondly, by allowing you to repay only interest as EMIs. Here, interest is charged only on the amount withdrawn.

Basically a flexi loan,

Offers a collateral-free credit line,i.e., limit of your flexi loan
Interest is charged only on the amount withdrawn, which becomes your EMI
Principal amount can be paid at the end of the tenure 
Offers loan for custom business needs such as working capital loan, machinery loan, SME and MSME loan and business loan for women

To learn more, check out aggregator sites to choose the best loan matching the needs of your business.

Also Read : Flexi Business Loan vs Business Term Loans: A Quick Look!