Ever since Non-Banking Financial Companies were introduced to India’s financial sector, the lending market has undergone a sea change. With their aim to provide inclusive growth to the country’s financial infrastructure, entrepreneurs today can easily avail quick business loans irrespective of their size of operations.
These loans are available at competitive rates of interests, along with several other attractive features and benefits. Facilities like quick approval and fast disbursal of business loans ensure entrepreneurs have access to external finance in a lump sum to meet their immediate funding requirements.
Several financial institutions provide quick business loans to fulfil the varied requirements of businesses. An entrepreneur must, however, ask himself/herself a few questions before applying for a loan to be well-prepared.5 Questions to ask before applying for a business loan
1.What is the amount you need as external finance?
First and foremost, an entrepreneur must have an outline of how much amount he/she would need as loan. Like, if looking to finance working capital with this loan, you must have a calculation of how much working capital your business needs, the current cash flow, etc.
It will help you decide on the loan amount required, thus preparing you to look for the right lender who can provide you with the right loan amount. Today, some lenders offer unsecured advances of up to Rs. 30 Lakh with minimum documents and eligibility criteria.
Also, an idea of the total amount required will help you estimate the EMIs and allocate funds for instalment payment accordingly.
2.What expenses do you plan to meet with the loan amount?
You must also have an outline of expenses you plan to meet with the loan availed. A well-planned expenditure in place signals the lender of your informed decision to avail a business loan.
Also, it indicates that the loan amount you seek is sufficient as per your business’s requirements, thus becoming a positive point for your application.
3. How do you plan to repay the loan?
As loan repayment is a significant concern for lenders, they want to be doubly assured of whether you will be able to repay the advance availed in time. Hence, if you have a plan in place about which types of income you will allocate for loan repayment, the lender can be assured of low lending risk, and be willing to extend quick business loans.
A well chalked-out plan for loan repayment also helps you manage your debts efficiently.
4. What are the eligibility criteria and documents required?
Once you have answered the above 3 questions and decided on the lender, make sure to check the business loan requirements. Meet all the eligibilities and keep all documents handy before applying with your lender to fast-track the application process.
Lenders like Bajaj Finserv have laid down minimum eligibility and documentation requirements to facilitate immediate financing of business loans to entrepreneurs.
5.What is your business’s credit score?
CIBIL or credit score is a numerical representation of your creditworthiness and an indicator of your repayment habits. A high credit score means you manage your debts well and repay them in time. You must, therefore, ensure that your business’s CIBIL score stays above 700 before applying for better chances at approval.
Answering all these questions will pave the way for fast approval and disbursal of the loan to your account. Utilise quick business loans efficiently for optimum business growth and repay in easy EMIs over the tenor.
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