ACompleteGuideToBusiness LoanApplicationProcess
Are you on the journey to begin a business? Or do you wish to expand your existing one? Growing or starting a business requires a lot offunds Hence, one ofthe ways to finance your business is by availing a online Business Loan
Many financial institutions offerBusiness Loans at a reasonable interest rate, giving you a user-friendly and fast interface to apply and avail ofthe loan instantly. Such a loan can satisfy your organisational needs and requirements effectively Hence,this post will give you a walkthrough ofthe Business Loan application process
OverviewofBusinessLoans
Similar to how people avail of a Personal Loan to fund their personal needs, businesses do require loans to;
1 Grow their business
2 Establish additional branches
3 Increase inventory
4 Recruit other staff, etc
A Business Loan covers allthese factors so that you can focus on approaches to expand your business and strategise how to find them So here are the different types of Business Loans you can try out for your company:
Term Loans
Working Capital Loans
Letter ofCredit
Bill/Invoice Discounting
Overdraft Facility
Machinery Loan or Equipment Finance
Government Business Loan schemes
Merchant Cash Advance or POS Loans
HowtoApplyforaBusinessLoan?
Here is a step-by-step process to obtain a Business Loan:
1 Identifyyourneedforaloan
This is the first vital step you must carry out in your loan process as you will have an organised plan as to why you need the loan This will ensure the lenders that you need funds for a genuine requirement of your company
2 Haveamapped-outbusinessstrategy
Once you identify why you need a Business Loan, create a business plan This lets lenders understand where you will spend and distribute funds in your business, revealing your intention to grow your company
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So have a concise yet detailed business plan to prove to the lender that you can make repayments on time This will help in avoiding loss on the lender’s part Additionally, do mention these pointers in your business plan to get your application sanctioned:
Your business’s motive Company’s future goals Company’s past achievements
3 ResearchandCompareLenders
This is a crucial step in your loan journey You must prioritise finding an authentic lender and the best loan options while availing of a Business Loan in Delhi, Mumbai or any other city in India Since numerous financial institutions are offline and online, it’s best to research and compare loan options and know the lender’s loan terms and eligibility criteria
If you wish for quick loan approval, you must apply online Otherwise, visit the lender’s branch with a duly signed application form and the needed documents
4.Identifyyourcurrentcreditscore
Generally, lenders favour applicants with a good credit history and a CIBIL score over 700 However, an adverse credit history with missed or late payments can be an alarm for lenders Therefore, it’s best to check your credit score before approaching the lender to get a Business Loan In Delhi and other metro cities,there are financial institutions with both offline and online presence You can apply after checking your credit score If your score is low you can take steps to improve your score
5.CalculateyourEMI
Calculate the necessary funds for your organisation to avoid adding more debts leading to bottlenecks Check whether you can repay them on time, as you must also pay interest on the principal amount you borrow during the repayment tenure You can use a Business Loan EMI calculator to find out how much you have to repay monthly to the lender
6.Knowyoureligibility
Apart from the credit score, some lenders require you to fulfilthe age, business vintage,turnover, credit score and minimum monthly income requirements ofthe lender
WhathappensduringaBusinessLoan applicationprocess?
Generally, when applicants apply for an offline or online Business Loan,their interest lies in getting the loan amount disbursed But knowing the entire application process is equally important to have
a seamless application journey
Here are a few steps involved in the process most financial institutions follow for processing a Business Loan application;
1 The business owner must apply to the financial institution oftheir choice, choosing the channel at their convenience Upon applying,the financial institution requires copies ofKYC and other supporting financial documents for verification
2 Then the application is examined on the basis offactors like theCIBIL score ofthe owner and the company Ifit’s suitable as per the lender’s requirement,the loan application gets approved
Conclusion
Business Loans can be a great alternative for financing your business Following the online Business Loan process as set by your preferred lending institution can help you in obtaining the loan easily
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