Checklist to Consider Before Applying for a Business Loan

Whether you are starting a new business venture, expand an existing one, or are planning your marketing and advertising campaigns, there are many expenditures that need to be considered. These expenditures could be for infrastructure, purchasing machinery, partnerships, licensing fees etc. A business loan can definitely be an ideal funding option to take care of these expenses.

However, before you apply for a business loan, it is recommended that you prepare yourself with all the requisites. Here’s a checklist that you could consider before applying for a business loan.

1.Do you have your business plan ready?

To know how and where the loan amount would be utilized, it is necessary. That you have a robust and comprehensive business plan ready in advance. A business plan provides a clear understanding of your vision and the different goals and objectives that this loan will help you achieve. It also helps you gain the lender’s confidence in your business idea.

2.Do you have a good credit score?

To avail a business loan at competitive rates, a good credit score is essential. Your credit score is one of the important factors looked into when processing your loan application. Credit scores are measured on a scale of 300-900. Therefore, ensure that you have a good credit score (more than 750 considered a good score) before you apply for a business loan. Please note, that during the application process for your business loan, the lender will retrieve your credit score which is essentially known as a “Hard Inquiry”. This would result in a slight dip in your credit score by a few points.

3.Check Business Loan Eligibility

You need to fulfill the eligibility criteria laid down by lenders / financial institutions to avail a business loan.Therefore, before you directly approach the lender with your loan application, follow the below eligibility criteria .

• You must be a citizen of India.
• Have you compared all the lending options?
• Have you done all your research about the viable options available in the market? Often there is a misconception that you can avail a loan only through a bank, which is definitely not true! A Non-Banking Financial Company (NBFC)/ Digital lenders can provide you a loan as well.  It is highly advisable that you compare all the banks and lending institutions. To check if they extend the kind of loan you are looking for to get maximum benefits of business loan. Look for a lender who offers business loans at the lowest interest rates and best deals.

4.Are all your documents required for business loan in place?

A loan can be processed faster and with ease if all the required documents are in place at the time of loan application. The lender might ask you for documents like your financial statements, tax returns, address proof, identity proofs, cash flow statements, profit & loss statements etc. Furnishing these along with your loan application can help you avail the loan without any delay.

To apply for business loan : Click Here