Understanding how to apply for a Business Loan and availing loans has been made simple with NBFCs bringing in technology to make the loan process simpler.
The process becomes easier with a little preparation. You can manage expenses and have more money to invest in the business with a Business Loan.
Read on to learn how to prepare for a Business Loan application.
Plenty of Options Available
You can take a Business Loan based on your specific requirements. Lending institutions offer short- and long-term loans to enable entrepreneurs to expand their business.
However, you must thoroughly research financial products and pick the one that offers the most favourable terms. At times, you may feel that all loans are similar, but then there can be considerable differences between their eligibility criteria, terms and conditions, and interest rates.
Follow the steps mentioned in this post to prepare a strong case for your Business Loan.
How to Begin Your Business Loan Journey?
Business Loans can be a great way to expand your company. You must know what you are getting into before you start the process.
- You must have an idea of how much money you need and why. It will help you make the right decisions from the start.
- Another thing to consider is whether or not your business has enough collateral. When there isn’t enough security available to get the loan, you can go for a collateral-free loan with NBFCs like Clix Capital.
- Don’t forget about interest rates. Looking at the long-term cost of borrowing is important to avoid any surprises down the road.
Have a Detailed and Concise Business Plan
You have been in business for years now, and you know that having your business plan ready can make all the difference between success and failure.
Understanding how your business works and how the Business Loan can help it grow and touch further heights is important to help you decide the loan amount needed and your repayment capacity.
In your business plan, make sure to include all significant opportunities for growth you have seen or expect to see, potential risks which could hurt the business if not managed correctly, and what you can do to mitigate those risks before they arise.
Prepare the Proper Documentation
While it’s true that every financial partner requires documents, each financial partner may require slightly different documentation. It is important to understand what is necessary and how to prepare your case for a new Business Loan before you approach any financial partner.
The documents you need to obtain an unsecured Business Loan are listed below.
- Address proof (Aadhar Card, Passport, Voter ID, Driving License, Last two months’ Utility Bills)
- Identity proof (Aadhar Card, PAN Card, Government ID)
- Financial documents (PAN Card of Firm, Company or Applicant, GSTIN, 6-month bank statement, Copy of the most recent ITR form along with computation of income, audited balance sheet and profit & loss account for the previous two years, Proof of continuity of business of 3 years)
- Proof of ownership
- Current additional financial obligations
Make Sure Your Credit Score Is Sufficient
The CMR score of your business and your credit score is one of the most important factors that financial partners consider to approve your loan application. Your chances of getting approval for a Business Loan increase with a positive credit history.
For instance, when you apply through Clix Capital, they require a CMR score of up to 6 and a CIBIL score of 700 and above for Business Loan approval.
Pay Existing EMIs on Time
The best way to make your case for a new Business Loan is to ensure you are on track with your current and existing credit payments.
If you have some debts, pay them back consistently before applying for a Business Loan because your credit score depends on this.
Clix Capital as Your financial partner
Earlier, getting a Business Loan was a tedious process, and business owners sometimes were frustrated or confused with the slow and confusing process of applying for loans. Getting a Business Loan is no more challenging.
You can find all the information online and apply for a Business Loan on the Clix Capital website. They have easier loan approvals, lower interest rates, and business-friendly policies.
Wrapping Up
When you want a Business Loan, you must understand how your company can use funds to your benefit. Be clear about your goals and prepare a budget in advance. Whatever the case, it’s essential to consider all the options and ensure that your business is ready for the next step.
Good luck!
