MAM
LoanTap’s technology division LTFLoW elevates Gautam Sinha as CEO
MUMBAI: The technology focussed division of LoanTap, LTFloW announced the appointment of Gautam Sinha as chief executive officer on Thursday. Prior to this, Sinha was marking his time as senior vice president of LTFLoW division of the online Fintech platform.
Based in Pune, Sinha’s responsibility will involve working towards the functioning of and executing all projects at hand of LTFLoW. He will be responsible for business growth and build upon the company’s success in growing client participation and meeting commitments. He will be working towards the operational perspective of the organisation. Sinha will be responsible for the smooth functioning of LTFLoW and lend his knowledge and governing skills as a tech expert to the growth of this independent division.
Sinha has over two decades of experience, having served in responsible positions in organisations like Infosys, HCL, and Edgeverve, to name a few.
He has been instrumental in bringing about major innovations within LoanTap and has been actively involved in bringing operational efficiency to the organisation, said the company in a statement. He specialises in digital transformations, innovation and building components which help to homogenize and augment business processes for development. His deep-rooted knowledge and experience in product development, managing large size programs, goal-oriented project planning and executions & defining strategies for continuous improvement have been key assets for the organisation.
Speaking on the appointment, LoanTap founder and CEO Satyam Kumar said, “Gautam is not just an industry insider, but his experience and knowledge make him one of the biggest assets to the industry. We are extremely proud to have him as a part of the leadership team. His expertise and leadership are sure to guide the company towards heightened customer success and create new products that will take this space to a whole new level.”
As the CEO of LTFLoW, Gautam Sinha added, “It brings me immense pleasure to have been given the opportunity of Chief Executive Officer of LTFLoW. I am looking forward to this role. Tech enabling is the backbone of every business today as it widens the scope of every business and in a post-pandemic world, this is exceptionally important. With technology at its heart, we are looking at transforming every transaction and every process to get more efficient, seamless and hassle-free.”
“Our customers are our motivation and we at LTFLoW understand that financial inclusion is only going to be possible when we digitise the entire process and make it beneficial for them. Business transformation towards growth has always been key and in my new role, my aim will be to mobilise the team and continue with our pursuit of impactful customer experience,” he further said.
Every business owner knows that capital is the lifeblood of growth. Whether you are expanding operations, purchasing new inventory, or upgrading technology, external funding often bridges the gap between ambition and reality. However, the cost of this funding, specifically the Business Loan interest rate, is a key factor in your company’s financial health.
Understanding how interest rates function is not just about knowing your monthly payout; it is about grasping how they influence your daily cash flow and long-term expansion plans. A competitive rate can support profitability, while a high rate requires careful planning to ensure sustainability.
How Is Business Loan Interest Rate Calculated?
Before understanding the impact, it is helpful to know how lenders arrive at a specific interest rate. It is rarely a random figure. Lenders assess several factors to determine the risk associated with lending to your business.
- Credit Score: A high credit score (typically 750 or higher) indicates financial discipline and often results in lower interest rates.
- Business Vintage: Lenders look at how long a business has been operating to assess its stability. A longer operating history usually indicates lower risk during loan evaluation.
- Financial Health: Your profit and loss statements, balance sheets, and financial statements are reviewed to evaluate your repayment capacity.
- Market Conditions: External economic factors, such as the Reserve Bank of India’s (RBI) repo rate, also influence lenders’ base rates.
Lenders use these criteria to calculate a specific interest rate that reflects your business’s risk profile. By maintaining a strong financial profile, you can qualify for more competitive rates, which help reduce your overall borrowing costs.
Impact Of Interest Rate On Cash Flow
Your cash flow represents the net amount of cash and cash equivalents being transferred into and out of your business. The Business Loan interest rate directly affects this balance.
- Monthly Outflows: The interest component is a key part of your Equated Monthly Instalment (EMI). A higher interest rate increases your EMI, which means more cash leaves your business every month.
- Working Capital Availability: If a large portion of your revenue goes towards servicing high-interest debt, you have less liquid cash available for daily operations, such as paying salaries, buying raw materials, or managing overhead.
- Profit Margins: Interest payments are expenses. Higher expenses reduce your net profit margin. If the return on investment (ROI) from the borrowed funds is lower than the cost of borrowing, it can strain your cash flow.
Effectively managing your loan’s interest rate is, therefore, important for maintaining healthy cash flow and operational stability.
Impact Of Interest Rate On Business Growth
While cash flow is about survival today, growth is about thriving tomorrow. Interest rates have a ripple effect on your expansion plans.
- Investment Decisions: When rates are low, the cost of borrowing is reduced. This helps businesses to take the next steps, such as opening new branches or investing in heavy machinery. Conversely, high rates might force you to delay these capital-intensive projects.
- Competitive Edge: Businesses that secure funds at lower rates can afford to price their products more competitively or invest more in marketing compared to rivals burdened by expensive debt.
- Future Borrowing Capacity: High-interest debt that strains your finances can affect your debt-to-income ratio. This might make it harder to qualify for additional funding in the future when you need to scale up further.
Therefore, a competitive interest rate is not just about cost savings; it directly assists your business’s ability to grow and compete.
How To Manage Interest Rate Fluctuations?
Interest rates are not always static, especially if you opt for a floating rate loan. Here is how you can manage the variance:
- Maintain a Strong Credit Score: Always pay your EMIs and credit card bills on time. A strong profile gives you leverage to negotiate better terms during balance transfers.
- Opt for Fixed Rates for Long Tenures: If you predict market rates will rise, locking in a fixed interest rate can provide predictability for your EMIs.
- Prepay When Possible: If your lender allows part-prepayment without high penalties, use surplus cash to reduce the principal amount. This lowers the total interest burden over the loan tenure.
By following these strategies, you can effectively manage the impact of fluctuating interest rates and ensure better control over your financial commitments.
Choosing The Right Lender
Finding a lender that understands your unique business needs is important. Look for one that offers Business Loans tailored to support your aspirations with competitive interest rates and transparent processing.
A lending institution like L&T Finance ensures you can quickly access funds after successful verification. With minimal Documentation and fast approvals, you can focus on what matters most: running your business. When you’re ready to take the next step, you can apply for a Business Loan online through their website or app for a seamless experience.
Conclusion
The interest rate on your Business Loan is more than just a percentage; it is a decisive factor in your company’s operational efficiency and growth potential. By maintaining a healthy financial profile and choosing the right lender, you can ensure that the cost of capital works in your favour.
Make better borrowing decisions to keep your cash flow healthy and your growth trajectory upward.
