India has recently witnessed remarkable growth in its small and medium-sized industrial segment. Easy business financing has been one of the top propellers for this growth, with changes in key policies and the introduction of dedicated schemes being some other reasons.
Given that you can easily avail a business loan today due to eased accessibility and lowered eligibility thresholds, all you need to do is check out your suitable financing option and apply for it.
Top 4 tips to avail a business loan in India
Given that these are mostly unsecured advances, the lender needs mandatory fulfillment of all criteria, the higher the better. To that end, and to keep your borrowing profile speck clean for improved possibility of loan approval, you can always take a few necessary steps forward. Here’s a list of some smart steps you can take to avail business financing with ease in India:
Check and maintain both individual and business credit scores
Your venture’s creditworthiness ultimately determines how easily you can avail the business loan. A credit score exists as a strong parameter for measuring this, making it crucial that your business holds a score of at least 750 to availing funding. Additionally, your individual score must also touch this minimum mark to represent credit discipline. You must take the necessary steps if your business credit score is low.
Outline the need for business financing and apply only as much as required
A business’s loan availability hinges greatly on whether they carry clarity regarding why the funding is needed and if such borrowing decision has been assessed thoroughly. To that end, you need to identify the precise purposes that require financing, which is also a prudent way to go forward. For instance, you must be aware of how much working capital your business needs if availing the loan for the venture’s operation financing.
Plus, you must also see to it that the loan amount you apply for matches accurately with this requirement. Thoughtfully availed business loans can help you successfully implement a big project.
Borrow less than your financing capacity
Every business carries a limited borrowing capacity based on its financial standing. It is ideal to not exhaust this capacity since that leaves the finances loaded with a high repayment liability, also increasing the borrower’s risk profile.
So, you can check this capacity with the help of financial tools like a business loan calculator and apply for an amount that does not exhaust it. You can also use a business loan EMI calculator to check repayment affordability, and apply for a loan amount accordingly.
Leverage your pre-existing relationship with a lender for borrowing
If you have availed a business loan previously with a financial institution and have had a good relationship with them, you can leverage it to avail funding with ease. Lenders are often prone to financing advances to borrowers who they have a good credit history with.
Financial institutions like Bajaj Finserv also simplify funding and make processing quick for existing customers with their pre-approved loan offers. These offers are available on a host of financial products, like business loans, personal loans, and credit cards. You can check your pre-approved offer with minimal personal details.
For quick business loan processing, you can plan to keep the documents required handy that complete easy paperwork. The list of business loan documents required is simple and easy to fulfill. Make sure to check with your lender both eligibility and paperwork criteria before applying for hassle-free loans.