Mr. Abhishek Malhotra, a resident of New Delhi, had worked for a top MNC company for the last 10 years. He was in the software production department and had gained enough knowledge about designing, launching a software during his work tenure.
He had left his job some three years before to establish his small business concerning software development. Things took time to establish, but orders came after a while, and now his business was all set to go to the next level. He had managed the show with his savings that he had managed during the 10 years of his employment.
However, since his business was poised to become big, he was concerned about the funding part as increasing orders meant everything in order including money.
That’s when he applied for a small business funding in the form of a loan for business that could give him a big amount. He was able to get a business loan of up to Rs.30 lakh at a lower business loan rates.
If you are stuck in a situation just like Abhishek, even you can apply for quick business loans to cover your needs of the firm easily. But before you jump on to the next step of applying for a business loan, you should consider some points to help you prepare!
Vital business loan considerations to make
Here are some vital points to consider before applying for a business loan such as:
Know your CIBIL Score
If you happen to be applying for a loan for business with a conventional lender, be sure to know that your Credit Score will be the first thing that it will consider. Thus, before you get in touch with a bank or a non-banking finance company (NBFC) for a business loan, get your numbers of Credit Score. It is vital to do because if you don’t have a good score, your loan application may be rejected. Hence, knowing a CIBIL Score beforehand can let you improve it so that it’s approved later with hassles.
Shop around for a better deal
Once you are convinced that you have a good Credit Score, you should not go for the first business loan offer that comes your way. Always know that leading lenders are vying to offer customized deals to noteworthy borrowers and you should also settle for the best deal. For that, you can go through a third-party website where numerous business loan deals are listed, check all the offers, and business loan interest rates. Once you have shortlisted some lenders, again look for best deal among them, and then only apply for one that suits your needs and affordability the best.
Know what and how much you need
If you are unsure of an amount that you will need and for what purposes in accordance with your financial profile, your loan request may not get approved. You can consult with a known financial expert to guide you regarding this. Yes, applying for an amount that can complement your expected needs beforehand will see your small business funding request getting approved.
Understand the loan process of a lender
Sometimes, your business needs may not wait for the indefinite time for a loan to be approved. Hence, always be sure of the loan process of a lender before applying for it. Ask the lender how much time it will take for the loan for a business loan application to approve along with the time taken for documentation, completion of other formalities and finally the money disbursement. These days, you can grab a business loan, and the application to money disbursement process takes lesser time. If possible, try applying for the small business funding with an NBFC as they are faster!
The Bottom Line
Unless you are unaware of the loan for business elements as discussed, you will face hurdles while trying to get it. You are now aware of what aspects to consider, so you can confidently apply for it after determining all factors.