Managing the cash flow is an important component of any business. For most small businesses, timely access to credit is the key to keeping the business afloat. But how do you avail credit when you are already in need of working capital?
If you are looking for a small business loan in India, then the internet can bring the best loan offers from around the country to your doorstep. A basic research will yield lots of information on how to get a small business loan in India. To help you in your search, here are some tips on how to get small business loans in the most hassle-free way possible.
Getting A Small Business Loan – What You Need to Know:
Getting a business loan - be it for a large or a medium or a small enterprise can be a difficult task given the high number of rejections that small business owners face from lenders. Business loans can be secured or unsecured in nature. Most lenders would require you to pledge collateral of some sort, if they are not confident about your repayment capacity or if they are not convinced with your business plan.
Keep the following tips in mind while applying for a small business loan in India:
• Check your eligibility online. Many lenders allow you to do a quick check of your eligibility on their website and they have their own set of eligibility criteria. This generally includes minimum turnover, number of years in business and minimum net annual income. It is important to make sure that you qualify for each of these before you apply for the loan to avoid the possibility of being rejected.
• Have a robust business plan ready. Lenders will lend you money only if they think that you have a clear idea on how the money will be used. They need to feel reassured that their money will be used productively. A clearly thought-out plan that includes cash flows will be a significant factor in your loan being approved.
• Check your credit score before applying for the loan. Borrowers should be aware of their credit health to ensure they are in good credit health. Ensure that everything stated in your credit report is accurate and up-to-date. Having a sound credit history is of supreme importance, as it conveys to lenders that you are responsible with credit.
• Ensure that you have a healthy personal credit score. Many borrowers think their personal score will not be a factor in being approved for a business loan. On the contrary, if you have a good personal score, lenders might be more willing to consider your business loan application.
• Have the required documentation ready in hand. This will include but is not limited to ID and PAN card details, latest bank statements, latest ITR returns along with a CA certified profit and loss sheet among other requirements. Make sure that you include every document when you submit your application.
Once you determine the kind of loan you want and the lender, you can go ahead and apply for the loan online, or ask for a representative to contact you, or contact the lender directly through the customer support contact details on their website.