5 simple ways to get your business loan approved
In today’s competitive market, good businesses increase their bottom line by staying relevant. Whether you deal with services or products, as a business owner you can only stay ahead by pursuing growth. This demands capital, which is not always something that abounds when you need it. Still, you can address the lack of capital with smart financing options like an MSME loan.
When used wisely, the capital from an SME loan can boost your business turnover and even help land you a decent chunk of the market share. However, before applying for secured or unsecured business loans, it is important to prepare thoroughly. For a new business, loans like these are often not easily approved. In such situations, where turnover in business and revenue can’t be played as strengths, demonstrating reliability is key. To help with that, here are five simple tips to help you secure approval on a business loan.
1. Stay informed about the different types of loans
Not all business loans are the same and learning about the differences can put you at an advantage. For instance, an MSME loan for a new business will have certain concessions that make it easier to qualify for. Similarly, a loan for women entrepreneurs is sure to have special benefits that may tilt the odds in your favour. Staying informed about the different loan types can also help you identify options that are tailored to your need.
2. Keep tabs on your personal and business credit score
One of the criteria to qualify for an MSME loan is that you and/or your business must maintain the required standards of creditworthiness. There are 2 metrics to take care of:
● Your CIBIL score
● Your company’s CIBIL rank
Lenders are sure to check these metrics before approving a loan. By keeping them healthy you can get quicker approvals, larger loans, and better interest rates. At the very least, you should ensure that at least one of them is in the ideal range to increase your chances at securing funding.
3. Ensure you meet the business loan eligibility criteria
Making it a habit to check off all the eligibility terms helps you avoid an instant rejection, thereby sparing you wasted time, effort, and money. Typically, business loan eligibility revolves around business vintage, turnover, age of the applicant, and annual income. Some lenders like Bajaj Finserv simplify the process and have a lenient criteria. To qualify for Bajaj Finserv Business Loan, you simply need:
● A business vintage of at least 3 years
● IT returns filed for at least 1 year
● A healthy CIBIL score
● To be between 25 and 65 years of age
4. Gather all the required documents
One of the easiest ways to increase your chances at approval is to gather all the required documentation beforehand. These play a vital role in demonstrating your reliability and financial capabilities. Your business documents serve as an evidence of your eligibility and the business’ ability to generate revenue to pay off the loan. Typically, you may need to submit these documents:
● Identity proof (Aadhaar card, voter ID, passport, driving license, etc.)
● Address proof (electricity bill, ration card, lease agreement, etc.)
● Financial documents (IT returns, bank statements, balance sheet, profit & loss statement, etc.)
● Business ownership proof (Registration document, GST returns, PAN card, etc.)
Some loans also need documents of the collateral you plan to pledge, but Bajaj Finserv’s Business Loan does not demand collateral of any form and so, you have less documents to produce here.
5. Create a detailed and sound business plan
Besides meeting the eligibility criteria, you also need to convince the lender about your need for funding and your ability to use it profitably. The smartest and most effective way to do so is to present the lender with a detailed business plan. This must include cash flow projections, demand metrics, company goals, loan capital usage, and revenue projections. With a clear picture of your realistic business goals, lenders will be more confident in lending to you.
Keep these tips in mind before you apply for a business loan to have the best chance of approval. Better yet, pick a lender only after careful consideration and extensive research. Compare the top lenders and their offerings to find the most convenient and efficient offer.
A good loan to consider is the Bajaj Finserv Business Loan as it accommodates itself to almost any kind of enterprise, even a start-up. Business loans from Bajaj Finserv offer collateral-free capital up to Rs. 45 lakh and at competitive interest rates. Moreover, you can get loan approval in 24 hours.
The funding from this MSME business loan can be used to expand operations, bolster working capital, buy equipment, invest in infrastructure, and more. Besides easy access to funding, you can also avail the Flexi Loan facility to enjoy greater repayment flexibility. This feature allows you to borrow from your pre-approved sanction as needed, without any extra charge.
Here, interest is only charged on the amount withdrawn, allowing you to efficiently manage the business’ cash flow. To enjoy all these features of this online business loan, check your pre-approved offer today.
Disclaimer: This content is distributed by Bajaj Finserv. No HT Group journalist is involved in the creation of this content.