Header Ads

Availing a Business Loan - Here is the Beginner's Guide

The concept of loans and business are highly interconnected. Whether it isfor a new entrepreneurial venture or for the existing business’ operational growth, a business loan provides a much needed and convenient working capital to meet the targets. There are different types of business loans currently available in the market, but availing the right one, needs to satisfy certain prerequisites.

Make a Clear Assessment of Your Business Loan Requirements

There are many cases where getting a higher amount of funds via a business loan than what is required, is not difficult. It is due to this reason that borrowers sometimes end up taking more than the amount they require. This, can at times imply that that person has not prioritized their needs. Hence, you should consider prioritizing your needs which in turn will help you make the right business plan to be presented to the potential investor or lender. For example, if the cash return cycle of your business is slow, then choose a long term business loan. There are chances that timely repayment and the principal amount asked for can be well negotiated in your favour.

Make Yourself Credible For the Business Loan

Just like you need to make profit for your business, your lender needs that aspect in an equal measure. Hence, until and unless your lender sees the prospect of complete repayment of the loan, getting a business loan of your desired amount is difficult. For this, ensure that you have a good CIBIL score and also have worthy assets (real estate, bonds, stocks, insurance among others) based on which you can get the business loan.

Choose the Right and Credible Lender

Since the amount that you are seeking for with a business loan is comparatively higher than other types of loans usually, choosing the right lender is very crucial. There are a lot of nationalised and private banks whose sole aim is to lend money as they derive their profit out of it. But there are few where the lender (banks or otherwise) provides the much needed consultation to the borrower and helps him get the right business loan based on his needs. Most banks these days have websites with sufficient information and even helpline numbers to guide the customer. Hence make sure to do your own research before you reach out for consultation.

Have a Good Rapport with Your Bank

It is always good to have a consistent relationship with the bank with whom you started your financial journey but at the same time, do not hold back from looking for best business loan deals with other banking institutions.
Having said the above, below are some pre-requisites that you should be prepared with in order for you to avail a business loan:
·         Define the purpose of you loan as well as the end use of the borrowed amount
·         You must have all documents relating to your income and existing debt liabilities
·         Check your credit rating and identify gaps (if any) and how you can plug the same
·         Other documents should also be ready such as identity proof, bank account statements, financial statements, certificate of incorporation etc. etc.
Timely business financing is crucial for both large and small scale business. But with the many available options with respect to business loans it is very important to choose the right lender or bank as this determines the future of your business.
“Finserv Markets, from the house of Bajaj Finserv is an exclusive online supermarket for all your personal and financial needs. Loans, Insurance, Investment and an exclusive EMI store, all under one roof – anytime, anywhere!”
Powered by Blogger.