Do you have a breakthrough business idea but not acting on it because of the funds required? Looking for lenders to help craft a business plan seems to be a time consuming and burdening task. But it really isn’t that complicated if you take a step back and analyse the process. The past few years have made applying for these business loans a hassle-free process. Online business loan applications have made it a flexible process with the comfort of doing it from anywhere.
Financing a business plan in 2021 is easier than ever but finding a reliable lender is the task. Whether it’s buying new materials, hiring new employees, or marketing the product, using business finance may help you keep your operations running smoothly, no matter how large or small they may be.
Fortunately, there are five key golden steps you can follow to make this a tad bit easier.
Checking the Eligibility Criteria For A Loan
The primary and most essential step is to make sure that you meet the eligibility criteria required to apply for a business loan. It is mostly similar across all money lenders but may vary according to some factors regarding the type of business. Without being an eligible candidate, one cannot proceed with the application process.
Gathering The Documents Required
It is pivotal that the candidate is prepared beforehand with all the required legal documents and papers that the lender may need. Some common documents are; photo identity proof, business proof, income proof, bank statements and KYC documents (Aadhar Card, PAN Card, Voter ID card, Passport, Drivers License, etc.)
Sustaining A Good Credit Score
The credit score, also known as the CIBIL rating, measures the borrower’s creditworthiness. This helps monetary lenders in identifying your repayment capability. If there is proof that there are existing loans or bills that haven’t been paid, it may interfere with the current process of attaining a loan. Paying back these pending bills helps improve credit history favourably. This gives the lender a sense of assurance to move forward with the process.
Having A Solid Business Plan/Idea
Constructing a solid business plan that attracts the moneylender is essential, as it lets the lender know how the borrowed money will be allocated and put to use. A business plan should include is; business profile, management experience, loan request, loan repayment, collateral, bank statements, projections, etc.
Therefore, you must be transparent about your organizational objectives and revenue projections.
Clarify Any Hidden Charges That May Be Present
Finally, it is important to inquire about any additional fees or hidden costs, such as the loan processing cost. Raising questions about said costs ahead of time can spare you from being in a bind in the future.
Following the projections, if you believe you cannot afford the loan with the additional charges, you may need to seek an alternative lender. As a result, you should inquire about additional fees and penalties ahead of time to avoid these complications.
Applying Loan For Business Is Easier Than You Think
There are plenty of government loans for micro/small/medium businesses in India, which promotes and encourages unique business ideas in the country. Basically, turning business ideas into the real deal.
The Ministry of Micro, Small and Medium Enterprises, also known as the MSME, has schemes that provide loans for small businesses to help with infrastructural and entrepreneurial development. MSME loans have minimal requirements to fulfil and lesser interest rates that come with additional perks. And, the online application process is secure and ensures that the funds are legitimate.
Following these 5 golden steps while you apply for a business loan online vital, so make sure to check all the boxes before you do. Now is the time to get the necessary funds that you need to grow that dream venture you’ve always been putting off!
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