Travel Agency Business Loans – Low Rates & Easy Online Apply

Travelling is an intrinsic part of our lives for multiple reasons. Planning for a trip can be really time consuming and confusing, it is better to have experts manage the travel plan and arrangements. More often than not, you seek the assistance of a Travel Agency to bail you out to arrange for your travel plans against fees. The main area where the Travel Agency thrives is in Business and Leisure travel. Today India is ranked 12th in the travel and tourism industry’s contribution to the GDP of the country. The predicted annual growth of 7.8% for the decade 2013 to 2023 is indication enough to gauge the importance of travel and tourism in the economic growth of our country. In recognition of this potential, the Government of India offers several subsidies to entrepreneurs setting up a travel agency. There are also ample provisions for a business loan for a travel agency to boost the proliferation of such entities keeping pace with the growth in the industry.

Functions of a Travel Agency:

The primary clients of travel agencies are business travellers and leisure travelers. Their requirements are vastly different, and the travel agency has to procure the necessary components from different suppliers to cater to the individual needs of its clients.

The primary function of a travel agency is in selling the following:

• Transportation – For tourists, transportation is one of the most crucial aspects of travel that needs to be taken care of. As suited to your needs and budget, the agencies can provide multiple options like tickets to railways, airways, private cabs, buses. These options are centered to cater your preferences and time you want to spend in transportation.
• Lodging and accommodation – Unpleasant stay can lead to a disastrous vacation. It is one of the most important aspects for tourists. Tourism agencies can provide reliable options better suited to your needs and preferences. Moreover, these agencies have tie-ups which can lead to great discounts and even preferential treatment at the accommodation.
• Facilitating Entertainment avenues for individuals and groups
• Planning trips and itineraries – Agencies in the tourism space not only simply help you book travel and accommodation but also cater to people who don’t want to go through the hassle of planning a trip from scratch! It can be really confusing, time consuming and considering most people travel to unexplored places, having little to no experience about what the place has on offer can often lead to missed exploring opportunities. Here the agencies come to the rescue, as they can help plan trips with detailed itineraries so that you don’t have to go through all the hassle!
• Sundry travel arrangements – A lot of people often have to do sundry travel citing work related matters, travel agencies can come to rescue as they can help you figure out cheap and reliable and cheap travel and accommodation options.

Linkages of a Travel Agency:

To cater to the specific demands of its clients, the travel agency needs to closely associate and integrate with the service providers in each sphere that is related to travel and tourism as under:

Domain	Suppliers
Transportation Services	Airlines
	Railways
	Car rental services
	Bus services
Lodging	Hotels
	Home stays
Financials	Banks
	Insurance
Travel and Trips	Travel Agents
	Cruise Liners
Service Providers	Trade and Tourist Associations
	Tour operators both domestic and foreign
	Ground Operators
Others	Tourism Educational Institutes
	Agencies related to travel and tourism both in the government and Private sector

How to open a travel agency in India:

For starting a travel agency in India, the entrepreneur should have a clear plan as to why they want to pursue the business and if they want to cater to any specific niche and the scope of services they want to provide in the market. 

The entrepreneur would require the following things in place to operate the business:

• Business Plan
• Infrastructure
• Tie-ups in the Industry
• Funding Source
• Attractive Services and Payment plans

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Financials of a Travel Agency:

The multitasking activity of a Travel Agency requires meticulous planning and finance to run like any other business. It has to further comply with all the rules and regulations framed by the GOI with several registrations at the government level and the suppliers, especially the airlines and the railways. It further has to register for GST as the services provided by the agency is within its ambit. The travel agency financial plan includes:

• Setting up a travel agency infrastructure : Starting an agency originates from a plan to identifying demand supply gap in the industry, to start an agency in the tourism domain, the entrepreneur usually begins with setting up infrastructure like office space, establishing relations with suppliers and other agencies, tie-ups with service providers in the same industry, etc.
  
• Working capital : For any business, investment in consistency with the scale at which you wish to operate is important. Having adequate working capital in place to function is imperative to operate a travel business. Entrepreneurs can opt for various funding methods to fulfill their working capital requirement in forms of business loan for travel business.
• Online booking facilities – World is moving online and businesses are thriving on digital platforms. For travel and tourism businesses, business digitization not only promotes sales but also makes it easier to run efficient marketing campaigns. Overall, online booking facilities can greatly help the business with customer acquisition.
  
• Salaries for the employees : Any entrepreneur irrespective of the industry they’re operating in should always account for periods with irregular revenue, in such periods, although the sales are low, the fixed costs associated with operating a business are still present like employee compensation. An entrepreneur should have enough provisions to ensure that salaries are not affected.
  
• Credit to the clients – Travel finance is on the rise off late, and plenty of customers are looking to avail this service. You should be ready to relay services on credit to enhance your goodwill in the market. Also, for such a competitive market like India, being inflexible about providing services on credit may not fare well for the business. And having a ready line of credit in forms of loans to not allow credit to the client disrupts your working capital is essential. You can also tie up with a lender that provides tour loans.
  
• Bulk booking of services – As the name suggests, bulk bookings are usually heavy on cost, so It is imperative for you to have enough liquidity to manage any urgent bulk booking.
  

All this can be met by availing of a business loan for travel agency from a host of lenders like banks, NBFCs, and Digital NBFCs. The last-named has revolutionized business credit options in the country. At Lendingkart.com you are in for a hassle-free Business and Working Capital loan from Rs. 50 K to Rs. 2 Cr in a matter of 3 days.

Type business loan for travel agency in India:

There is business loan galore with the lenders waiting to offer travel agency financing with the following products that typically suits the business environment and the needs of a travel agency.

• Term Loan
• Line of Credit
• Invoice Discounting
• Merchant Cash Advance.

Term Loan for Travel Agency:

As the name suggests, a term loan is designed to meet the one-time capital need. The fund may be used to:

• Set up or expand the office and operations
• Technology upgrade or new equipment
• Add to inventories
• Grow your team
• Publicity etc.

Features of Term Business Loan
Quantum	Up to Rs.2C
Tenure	1 year to 3 years
Rate of Interest	Starting from 1.25% per month
Charges	One time processing fee
Security	Usually nil collateral
Eligibility	Usually specified operational history varying with lenders

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Line of Credit for Travel Agency:

It is an overdraft facility which endows you with a lot of flexibility with relation to your cash flow, which can change with the season.

Features of Line of Credit Business Loan
All the features are similar to the Term Loan except that you pay interest only on to the extent of funds used. You are free to deposit and withdraw to meet your financial needs.
Review	The overdraft facility is reviewed periodically

Invoice Discounting for Travel Agency:

It acts as an alternative to traditional business loans by providing instant funds against locked up invoices, ensuring that there is steady cash flow. The salient features of this credit product are:

• Get Instant cash
• Repay when your client pays.

Working of Invoice Discounting:

• The invoice is raised on the client
• The lender pays up to 90% of the value of the invoice
• Liquidate when you receive payment from your client.

Merchant Advance Loan for Travel Agency:

The use of a POS machine is the norm of the day when more and more people have got accustomed to the use of plastic cards for payment of their purchase. Most travel agencies are equipped to provide this digital platform to their clients. It is also a fact that significant transactions are routed through this mode. The loan is repaid using daily deductions directly through the POS machine transactions. It unlocks your funds in the eco-system of swipe machines.

Summary

Traveling is an important part of life, and travel agencies makes the entire process easier and hassle-free by taking care of end-to-end requirements for the customers. Travel and tourism industry in India has been on a rise since many years and there’s no end in sight considering how much India has to offer, with government support and plans to boost the industry, annual growth rate of 7.8% is expected. 

Travel business caters to both business as well as leisure travelers, providing services like booking transportation (flights, trains, cabs, busses), staying arrangements like hotels, lodging, and even organizing personal and corporate events. They also plan detailed itineraries, helping customers avoid the hassle of planning and ensuring they don’t miss out on anything.

Like any other business, running a travel agency also requires good financial management. Costs associated with starting a travel agency include setting up infrastructure, establishing supplier relationships, and investing in online booking systems to generate leads and increase conversions. Agencies must also manage working capital to pay employees and vendors on time and support credit sales, for this having a line of credit from a financial institution like a bank or a lender may really help..

Travel agencies can apply for various types of loans, including term loans for one-time needs, lines of credit for managing working capital requirements, invoice discounting for quick cash against unpaid invoices, and merchant cash advances based on card transactions.

To qualify for these loans, agencies usually need to be operational for a few months and provide necessary documents like business registration and bank statements. Also, having a good credit history is essential to ensure easier loan disbursement at favorable interest rates. Overall, loans help travel agencies grow and succeed in a competitive market!

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Loan for Travel Agency FAQs:

1. What is the eligibility for a loan for travel business?

The operational tenure varies with the lenders and the type of loan. At Lendingkart it is as low as three months.

2. Can I get a loan for travel agency business online?

Yes, the Digital NBFC like Lendingkart has made that possible.

3. What are the mandatory documents required for travel agency financing?

The documents generally required are:
• Business Registration
• Two years ITR for turnover over Rs.10L
• Bank statement
• PAN and Aadhaar.

4. What is the swipe history criterion for Merchant Advance?

The minimum is the installation and operation of the POS machine for a minimum of 6 months.

5. Is there any turnover requirement to be eligible for loan catering to travel agency financial plan?

It varies from lender to lender. However, the monthly turnover at Lendingkart is Rs.90K.

6. How much funding can I apply for based on my business needs and financial projections?

The amount of funding you can apply for as a travel agency depends on your specific business needs and financial projections. Various options, such as small business loans, commercial loans, and startup loans, are available with varying rates to support your tourism business. It’s essential to assess your requirements and credit options carefully to determine the most suitable funding amount.

7. Are the interest rates fixed or variable, and for what duration?

Travel agency financing options typically offer both fixed and variable interest rates, depending on the lender and the specific loan product. The duration of these rates can vary, ranging from short-term options for startup loans to longer-term commercial loans for established travel agencies. Rates and terms may be influenced by factors such as creditworthiness and the purpose of the loan. It’s essential to explore various small business loans for travel agencies to find the best fit for your specific needs and financial goals.

8. How long does the loan approval process typically take?

The duration of the loan approval process when applying for travel agency loans, such as small business loans for travel agencies, travel agency capital funding, or commercial loans for travel agencies, can vary. Typically, it ranges from a few weeks to a couple of months, depending on factors like the complexity of the application, credit options available, and prevailing travel agency loan rates. For those seeking tourism business financing or startup loans for travel agencies, it’s advisable to prepare thorough documentation to expedite the approval process.

9. What level of customer support or assistance can I expect during the loan application and repayment process?

When applying for travel agency loans, expect dedicated customer support throughout the process. Our team is here to assist with inquiries about small business loans for travel agencies, travel agency capital funding, commercial loans, tourism business financing, startup loans, and loan rates. Your success is our priority.