According to a global market analysis firm, the Indian economy is likely to register a 12% progression in 2021. This has been made possible by the swift monetary policy changes from RBI. The apex bank has taken necessary steps and reduced the key policy rates to help organizations find necessary business loans to support their activities in such turbulent times.
In its recent monetary policy meeting, RBI has decided to keep the repo rate at 4%. It has presented an opportunity for business owners to source necessary funding at an affordable rate. Consequently, they should also be aware of the ways through which they can secure credit for their business swiftly and without much hassle.
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Ways to get a business loan without any difficulty
Securing credit for business can be a hectic process, but this process becomes effortless if you cover the necessary points. Here are some tips –
Decide the loan amount in advance
Before making an application, it is imperative to determine the required loan amount to meet current monetary obligations. Doing so helps borrowers be specific about their needs, and then they can select a lender who can provide them with adequate funding.
Know the eligibility pointers
One of the easiest ways to get a business loan quickly is by meeting the eligibility parameters without fail. Even though every lender has separate requirements in this instance, but certain factors remain constant. Hence, borrowers need to be aware of them –
- Credit score: A credit score is a 3-digit number that embodies an individual’s creditworthiness as a borrower. Usually, most lenders ask for a rating of above 750 to approve any loan application.
- Repayment history: Lenders consider this pointer to evaluate whether a borrower is responsible or not. Hence, applicants with a clean repayment history get preference.
- Business vintage: It is another vital point to meet for a business loan. However, the exact details vary as per the requirements of lenders.
- Annual turnover: Financiers also consider annual income crucial as it is crucial to decide individuals’ repayment capacity.
Meeting these criteria ensures that a loan application gets approved, and it advances this process further.
Keep the documents in order
To expedite a business loan application process and avail funds quickly, individuals need to keep the essential documents in order. Since the list is long, here is a guide –
- Business documents, i.e., partnership deeds, registration certificate, licences, etc.
- Income proof, i.e., ITR, balance sheet, profit and loss statement, etc.
- Bank account statement.
Find a suitable lender
The previous pointers have shed light on factors that lenders keep an eye out for while evaluating business loan applications. However, finding a suitable lender is of utmost importance as it can help them apply and secure a business credit without any hassle.
This process has two benefits –
- Individuals can avail a deal that matches their requirement and keep their business financially healthy
- It reduces the chances of rejection of loan application and default during repayment
In this process of finding an appropriate lender, borrowers should keep some vital pointers in mind. For example –
- Loan application process
- Additional rates and charges
- Repayment terms
- Loan amount
- Approval rates
- Market reputation
- Limitations of the credit, if any
Apart from these, business loan interest rate in India is one of the most important factors to consider here. Since the interest rate determines the total cost of borrowing, individuals can use an online calculator to find their EMIs and then select a financier accordingly.
Completing the application process without fail
It is vital to complete the loan application process without any hiccups to avail of any credit swiftly. The implementation of the online process has already streamlined this process, but individuals often make mistakes while completing it. Resultantly, the rejection can delay this process further.
Look for pre-approved offers
Leading financial institutions like Bajaj Finserv extend pre-approved offers to their existing customers that streamlines the application process. Offers like this allow individuals to skip the hassle of application and documentation, as they already have a working relationship with respective lending institutions. You can also check your pre-approved offer by submitting your name and contact information.
Business loans are unsecured; hence the lack of collateral and the absence of usage restrictions make it a favourable financing method for entrepreneurs. They can now easily avail of credit by keeping in mind the pointers mentioned above and expand their manufacturing business or other ventures accordingly.