6 Simple Ways to Get Your Business Loan Approved
Lenders sanction business loans after evaluating the eligibility of the applicants in terms of business turnover, vintage, documents, etc. To apply for business loans in a hassle-free manner and make the sanctioning process less time-consuming, applicants should be aware of certain important aspects that ensure quick approval.
Tips to strengthen the chances of getting business loans
Considering the present economic situation, it is fair to say that apply for business loan is a challenging task, especially for small business owners. Nevertheless, here are some ways you can secure the chances of getting your business loan sanctioned:
- Present a proper business plan
Lenders generally assess the borrower and check how much revenue the business has been generating before sanctioning the amount to mitigate the risk of repayment defaults. You need to make sure that the lender is convinced with your future goals for the company, as based on that, they will sanction your loan.
Additionally, keep all the company papers, and business operation plans accessible as that falls under the documents required for business loans.
- Choose the loan amount and tenor wisely
It is necessary to have an estimation of how much working capital your business needs, along with any other monetary requirements.
Opt for the loan amount depending on your repayment capacity so that handling other expenses does not get that difficult. It is also important to pick a suitable loan tenor to make the interest charges and EMI bearable.
- Have multiple payment plans
If you are thinking about expanding your business, it is expected that you will need a large amount to support all the financial requirements. Having more than one repayment plan automatically makes you a responsible borrower and helps you acquire credit at reduced interest rates.
- Gather necessary documents
The documents required for business loan mainly include bank account statements, tax returns, copy of business incorporation, and other financial documents. Even though the requirements vary from one lender to another, it is better to keep all the basic documents handy in order to make the process less time-consuming.
- Check the eligibility parameters
If you are going to apply for business loans, you need to check all the eligibility parameters that your preferred financial institution has set. There are certain aspects lenders mainly focus on, for instance, a credit score and repayment track record.
It is advisable to maintain a high credit score (750 or above) to get prompt approval. Also, make sure to maintain paying your EMIs on time, avoid foreclosures, etc., as that affects your repayment track record.
- Choose a lender after proper consideration
Approaching different lenders is necessary to get a better repayment schedule. Going for the previous lender also helps in getting quick approval as they already have your repayment track record.
Few lenders such as Bajaj Finserv also extend certain pre-approved offers these days, which are available on different financial products, like business loans, personal loans, etc. If you are looking for a better deal on your business loan, make sure to check your pre-approved offer by submitting your name and contact details.
One of the biggest challenges young entrepreneurs face initially is the scarcity of money, and with time the monetary requirements keep increasing. This is why every SME needs a solid financial plan to keep up with the growing needs.
India had to face some unprecedented challenges in 2020 with the pandemic hampering the economic and social life of the citizens. The SME sector, which represents more than 70% of global employment, met an existential threat, and around 40% of businesses remained disrupted till the end of February 2021.
Since the country is heading towards economic revival, small business owners are looking for credit facilities like business loans to deal with cash flow shortages. Apart from using the funds to tackle the financial crunch, such loans can also be used for business expansion, purchasing inventory, handling operational expenses, etc.
Thus, if you are planning to apply for business loans, consider keeping the above-mentioned aspects in mind and expect a prompt response from your preferred lender.