Business loans are usually sanctioned for starting a new business, for buying machinery and equipment and for business expansion and related activities. A business loan helps to meet the working capital requirements of an entrepreneur or an enterprise which aims to make an additional investment to grow its business.   

Your business loan application can be denied due to some common mistakes and disqualify you from securing a business loan.

• First and foremost, you should provide a concrete and detailed business plan to the bank or any other financial institution from which you are seeking a business loan. The lender thoroughly scrutinizes your business plan, and if he is not convinced with your presentation, he is likely to turn down your business loan application. This stands for online business loan applications also.
• Some lenders require collateral security for a business loan in the form of residential or commercial property, stocks, insurance policies, commercial vehicles, etc. and lack of collateral may result in loan rejection.
• You need to have a good credit score while applying for a business loan, and if you have defaulted on any loan payments in the past, the banks or private lenders are hesitant to sanction a business loan.
• Another common mistake that borrowers make while applying for a business loan is not reading the exhaustive loan agreement documents before signing them. One must go through the documents carefully as there are hidden charges and clauses mentioned which should not be ignored.

  Must Read: Things To Remember When Getting A Business Loan