Setting up their own Chartered Accountancy (CA) firm is a dream of many CA professionals. To fulfil this ambition, having the right amount of capital becomes extremely essential. A strong financial foundation can help you establish and run your own firm with ease. Right from leasing an office space to upscaling and even hiring, you can do it all with a CA Loan. You can get up to ₹50-55 Lakhs, as the loan amount.
It is essential to plan and channel the funds in an appropriate manner to make the most of it. So, wondering how this loan can be helpful in setting up your own private practice? Here are some use cases for which you may need a CA Loan.
- Purchase/Lease of Office
The very first step to establishing a successful practice is to lease office space in a well-chosen location, which ensures good customer footfall. However, we all know the difficulties of renting or purchasing real estate. Even if you do manage to find a workspace in the perfect location with amazing facilities, your funds may fall short. Leasing or purchasing property is an expensive activity, but it is an investment worth making. You can increase your budget with the help of a loan. Don’t let the prices of real estate hold you back, and get the ideal office space with a CA Loan.
- Furnishing the Workspace
Now that you have occupied an office, you need to furnish it with desks, locker spaces, meeting rooms, and other amenities. This is what truly makes your workspace welcoming and encourages productivity. Comfortable seating and a well-stocked cafeteria are also a must, to support your work spirit. All this can be made possible with a CA Loan.
- Getting High-Tech Equipment & Software
To gain an edge against other firms, it is vital for you to have access to cutting-edge technologies. Utilising state-of-the-art equipment and advanced software can be an expensive affair. This is where your borrowed loan amount comes into play. Be it a young enthusiast or a veteran, a CA Loan can be useful for all. You can purchase new top-notch equipment or upgrade your existing ones.
- Building a Team
Now that the office is officially set up, it’s time to get working. But hold on, how will you manage all that workload on your own? Invest in people and build a trustworthy team. A CA loan can help you manage the expenses associated with the interview, hiring, and onboarding processes. Furthermore, it allows you to pay them a generous salary and boost their morale. These efforts will increase the motivation of your colleagues and in turn, lead to better working efficiency.
- Managing Your Finances
With the firm up and running, the need for working capital is likely to arise. Maintaining a consistent cash flow and paying for basic requirements like utility bills becomes easy, as you can use the borrowed amount for these. With this loan, you can fulfil your short-term monetary obligations and ensure smooth functioning for all the verticals.
- Repaying Debts
A CA Loan allows you to direct your borrowed amount towards repaying existing debts and foreclosing them. In addition to this, you can also repay any personal loans or liabilities that you may have.
- Tackling Emergencies
Emergencies don’t come knocking, they break the door down. Be it a breakdown of your devices or a lack of funds due to halted payments. All of this can be taken care of with a CA Loan.
Be it an issue with your equipment or pending client payments hindering your cash flow, a loan can act as an emergency fund. When renovating your office or upgrading your software and electronics, it is possible that the cost exceeds the estimations. In such cases, credit can help complete urgent payments and allow things to progress smoothly. Handling your expenses becomes easy and convenient with a CA Loan.
Interest and Other Charges
The loan comes with attractive interest rates usually ranging from 14% to 17%. Additionally, the documents required for a professional loan are minimal, hence making the loan application process more convenient. Even so, it is crucial to note the fee and charges associated with a CA Loan before applying.
Typically you are charged a processing fee of approximately 2% of the borrowed amount. In addition to this, if you choose to foreclose your loan, you will be charged approximately 4% of the outstanding amount, along with the applicable taxes. Furthermore, if your cheque bounces, you are likely to be charged about ₹1,500 along with taxes.
Eligibility Criteria and Documents Required for a CA Loan
After having understood the various ways to utilize a CA Loan and the associated charges, it’s time for you to get started on your journey of getting one. The process is simple, and in multiple cases, completely digital. As per the eligibility criteria, it is essential for you to be an Indian citizen between 25 and 65 years of age. You must be a practicing CA and have a good credit score.
Now you might be thinking of gathering the papers you could be asked to submit when applying for a CA Loan. Here is a small list of documents required for getting this professional loan.
- KYC Documents
- Certificate of Practice (COP)
- Degree Certificate provided by ICAI
- Financials like ITR and Balance Sheets
- Bank Statements
You too can fulfill your dreams of owning your own firm. Apply for a CA loan and get started!