“Make in India” scheme by the Indian government has given rise to entrepreneurship in the country. Young minds are coming up with brilliant business ideas that are helping the Indian economy grow. However, the struggle doesn’t end with great business ideas; you will need continuous cash flow to operate business operations.
To help you with it, major banks offer business loans. These loans aid you to accumulate sufficient capital investment and also for the working capital purpose. While there are many banks ready to provide business loan for start-ups, it is left up to you to understand what your actual requirements are. Based on them and ability to repay the repay amount, the loan should be taken from the bank.
We have listed down a few pointers to consider before you apply for a business loan in India:
1) Have clarity on your business plan:
Before sanctioning the new business loans, most lenders will ask you about your business plan. The blueprint of your plan will be a proof of how you will utilise the funds and your capability to pay back. A confident business plan can get you guaranteed business loans in a short span of time.
2) Build good credit:
If you plan to start the business operations in the next two years, then it is important to focus on building your credit and contacts. An applicant with good creditworthiness will get loan quicker with less documentation process and interest rates. To have a high score in your credit rating card, start paying your bills on time, stay away from the defaulter's list when it comes to credit card payments.
3) Documents:
The bank can demand a set of legal documents for business loan which includes:
• Proof of identity and address
• Statements of income, balance sheet, and cash flow information
• Franchise agreements
• Contracts by third parties
• Commercial leases (if any)
• Copy of registration, licenses for conducting the business
4) Security or collateral:
It’s a standard process of putting collateral or any valuable asset as a security for your business loans. In case if you fail to repay the loan, the lenders/bankers can seize the collateral and can get the loan amount recovered. Cash savings, deposits, business inventory, are some of the guarantee accepted by banks.
5) Choose the right lender:
It doesn’t matter if you are choosing a traditional bank or a private lender for your business loan, it is crucial that it suits your business needs. Banks have also made the process easier by allowing customers to apply for a business loan online through their official websites. You can check for your loan eligibility, and use business loan EMI calculator to understand the equated monthly instalment to be paid.
To help you with it, major banks offer business loans. These loans aid you to accumulate sufficient capital investment and also for the working capital purpose. While there are many banks ready to provide business loan for start-ups, it is left up to you to understand what your actual requirements are. Based on them and ability to repay the repay amount, the loan should be taken from the bank.
We have listed down a few pointers to consider before you apply for a business loan in India:
1) Have clarity on your business plan:
Before sanctioning the new business loans, most lenders will ask you about your business plan. The blueprint of your plan will be a proof of how you will utilise the funds and your capability to pay back. A confident business plan can get you guaranteed business loans in a short span of time.
2) Build good credit:
If you plan to start the business operations in the next two years, then it is important to focus on building your credit and contacts. An applicant with good creditworthiness will get loan quicker with less documentation process and interest rates. To have a high score in your credit rating card, start paying your bills on time, stay away from the defaulter's list when it comes to credit card payments.
3) Documents:
The bank can demand a set of legal documents for business loan which includes:
• Proof of identity and address
• Statements of income, balance sheet, and cash flow information
• Franchise agreements
• Contracts by third parties
• Commercial leases (if any)
• Copy of registration, licenses for conducting the business
4) Security or collateral:
It’s a standard process of putting collateral or any valuable asset as a security for your business loans. In case if you fail to repay the loan, the lenders/bankers can seize the collateral and can get the loan amount recovered. Cash savings, deposits, business inventory, are some of the guarantee accepted by banks.
5) Choose the right lender:
It doesn’t matter if you are choosing a traditional bank or a private lender for your business loan, it is crucial that it suits your business needs. Banks have also made the process easier by allowing customers to apply for a business loan online through their official websites. You can check for your loan eligibility, and use business loan EMI calculator to understand the equated monthly instalment to be paid.
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