Lamosaic India Limited...
14 Nov 2024
Bank or IPO, Which is better ?
BANK VS IPO
Bank
1. Bank asks you to give 125 -200% collateral value of the loan amount, e.g. if you are seeking a loan of 10 Cr. then the bank demands you to give 15 Crore + of mortgage/collateral.
2. In the case of the Bank loan, the EMI starts from the very next month of 1st disbursement. (for a 5 years term you have to pay 60 EMIs, for a 10 years term you have to pay 120 EMIs).
3. For SMEs & MSMEs, it takes a lot of work to get a bigger loan as the Bank will see your turnover too.
4. Banks give you the loan amount in trenches/parts and ask you to produce bills & proofs.
5. Bank will have hawk eyes On your company's business and regularly want updates about your purpose of sanctioned loan.
6. The loan amount taken from the banks is your liability and you have to return it back otherwise, the bank will take legal action against you.
7. There is a processing charge applicable to your loan amount.
8. There is a foreclosure charge if you are going to close your loan account.
9. Banks do charge between a 9 to 12% high rate of interest annually.
IPO
1. Collateral-free capital money (don't put your assets on hypothecation/mortgage).
2. No need to pay heavy interest, what you have to pay if you take a loan from a Bank (for 5 years term is like paying 30% of the loan amount, 10 Cr. loan the amount you are paying back 13 Crores in return).
3. No need to pay heavy EMIs, no monthly burden on your budget.
4. No limits in IPO Size*( means even a small turnover size company can raise +100 Crores) that Bank will not give it to you.
5. You can further initiate FPOs after IPO (If you have raised any capital e.g. 10 Cr. from IPO then in a year or two, you can further raise 20 Crore by the FPO).
6. You will get the money in one shot, Banks give it to you in parts/installments.
7. No more interference in your management & planning by the Banks/3rd party.
8. IPO will act as your Company & Brand promoters.
9. IPO is the final destination of any Business or Company.
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