In This Article, We Are Going To Discuss Tips on finding the small business loan that works for you
It goes without saying that India’s market is emerging at quite a fast rate, and a part of which is kindled by micro, small, and medium enterprises (MSMEs) and budding entrepreneurs. This rapid growth of MSMEs has not only helped to generate scopes for employment but has also contributed to the GDP of the country.
So, if you are looking for small business loans for starting your business, the options are endless. You can obtain business loans from various sources that include both traditional and private lenders both- offline and online. No matter whether you are looking forward to starting or expanding your business, funding a new R&D, and enhancing your marketing efforts while increasing your revenues, with small business loans, you can actually make your dream come true.
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Tips on finding the small business loan that works for you
Let’s take a quick look at some essential steps to count while applying for a small business loan. Getting some practical advice from the industry experts is more likely to make the process of lending easy and hassle-free. Read on!
- Count on the ‘First things first’ when looking for small business loans
You need to understand in the first place that there are different types of business loan structures available in the market. And, the options might vary according to your specific requirements including, the loan amount, tenure of the loan, or your business needs. So, you’ve got the following options available with a reliable online lender –
- Term loans – Terms loans mean getting a lump sum amount for one-time capital needs, like for purchasing new equipment, expanding the business site, improving stocks, etc. In light of your one-time needs, unsecured term loans for short terms are the best options.
- Line of credit – If you are looking for frequent and constant cash in-flow, line of credit, also known as overdraft facility, can be a good option.
- Invoice discounting – This type of small business loan provides you with instant access to cash that’s there in your invoices- the prominent ones. It allows you to get money instantly for your invoices without having to wait for the client’s payment.
- Merchant cash advance – If a considerable amount of financial transactions of your business is done via card swipes, then merchant cash advance with a reputable online lender is a great idea.
- Learn about lenders that offer small business loans
There is no dearth of money lenders in our country. Let’s find out the options you have –
- Direct online lender
- Local community banks
- Commercial banks
- Peer-to-peer money lending platforms
- SBA-backed banking facilities
If you have been looking for an easy and cost-effective platform to get a small business loan, you can go for direct online lenders. There are several such entities that are reliable and work with minimal documentation.
- Your credit score and risk profile matters when taking business loans
Whether a lender will give you a loan or not depends on your risk and credit profile. They are more likely to check out the following factors:
- Outstanding loans
- Cash flow
- Credit score
- Assets and time in business
- Financial statement
Make sure to review these on your own beforehand and find a remedial solution, if needed.
- Keep important documents handy for getting small business loans.
A reliable and customer-friendly service provider will try to help you in the best possible way. However, you should also make sure to keep all the crucial documents handy. Most of the financial institutions ask for the following documents –
- Pan card of the applicant and the company
- Business registration certificate
- Proof of address of the applicant and the company
- Bank statement of the company for the last six months
- ITR (for a business loan > 15 Lacs)
- Security options you can offer
A lender will always be concerned about the borrower’s loan repayment ability. So, you should determine the guarantee or security that you can provide to the lender. The favourable terms you present to the lender, the better would be the change of getting your loan approved.
- Be specific about the amount of small business loan you want
The lender will help you with the business loan structures and procedures, depending on the amount of loan you are looking for. So be specific about your loan requirements. One of the most important things- you should go for an amount that you’ll be able to repay, without disrupting your finances. You’ll definitely won’t like to be known as a loan defaulter.
To sum up
These are some of the practical tips that you should keep in mind while finding a small business loan that works for you. If you have been looking for a reliable and effective online money lending platform for your business, Indifi is where you should turn to. Being a leading name in online money lending, this company can help you with easy loans with minimal documentation.
We Have Successfully Discussed Tips on finding the small business loan that works for you In This Article.