business loan eligibility

Things You Will Be Asked When You Need A Business Loan

NBFC-Business-loan-sss

Each day thousands of start-ups start with a vision and aim to make it the next best technology that the humans will be introduced to. While an idea is important, one also requires funds to make the idea into a business. This is where you will e required to apply for the business loan.

Before you take the business loan, know about the details you will be asked when you need a business loan.

  1. Collateral: Lenders do offer loan to businesses, but to reduce the risk, you will have to pledge and asset as collateral.
  2. Business plan and financials: No lender offers a loan without knowing the feasibility and the aim of its makers. This is where you will have to submit your business plan, it can also be a summary. Along with this, you need to inform about your expenses, your receivable and other financials that may be important to prove the credibility of your business.
  3. Personal Finance information: These details will include the details of your assets, vehicles, investment accounts and many more. In the case of multiple owners, the personal finance of each owner is to be submitted.
  4. Insurance Information: To aid risks, the lenders also prefer to advise the business to take insurance in case of death of any owner.

Conclusion

A business loan is a great tool that helps finance all your necessary expenses like buying equipment, renting, salary and others. Remember to keep the above points in mind when you apply for the loan.

Must Read: Business Loan vs MSME Loan: What’s the Difference?

Important Things Financial Institutions Ask if You Apply for a Business Loan

Securing funds through business loans continues to be the standard choice for businesses. With the advent of online applications, things have become easy “ business loan apply” options online.

But there are several things which everyone have to check before applying for business loan. Because every financial institutions have different requirements. But some of the common things are mentioned below which is surely asked by financial platform.
business lq

Crucial flags Considered by the Lender

  1. Collateral

Financial institutions scrutinise the collateral submitted by applicants to reduce the risk of default. 

  1. Business plan 

Most of the lenders request applicants to submit their business plan with a summary that includes details regarding the team, financials, product and company.

  1. Business financial statements

These audited financial statements should include both personal and business details of any debts in the past, credit card statements, and investment details.

  1. Details on accounts payable and receivable

Lenders would also necessitate reference details along with credit and sale history.

  1. Insurance details

To ensure there is no scope for default, lenders might request for the insurance details

  1. ITR and GST returns (of the past six months or one year.)

Conclusion

After the Startup India campaign in 2015, business funding schemes have been on the rise. Applicants can choose the best plan suited for them using a business EMI calculator. With the right lender and authentic data submission by applicants, availing a business loan is far from complicated.

Must Read: Stages to Get a Business Loan That you Must Know

What is a Business Loan & Who can Avail it?

Do you have an idea but not the funds? Looking to expand your existing retail store but short of money? Then there is a tailor-made solution for you. A business loan can help in uplifting your business while providing better liquidity for your business needs at the same time.

A business loan can be the only step separating you from your goal. Technology has made availing and planning a business loan much easier. With the help of a business loan calculator, you can calculate monthly instalments depending on the amount and tenure.

business

Who can avail Business Loan?

  • Salaried and Self-employed professionals

Salaried self-employed professionals like Freelancers, Chartered Accountants, Company Secretaries, etc. fall into this category.

  • Private and Proprietorship firms
  • Private limited companies
  • Enterprises-the minimum turnover 10 lakhs or minimal annual income of 2 lakhs per annum)
  • Individuals over the age of 22.

Final Thought

Before applying for a business loan, it is a good practice to check your requirements. Make a list of profit and expenditures, thorough analysis about loans is advisable and try not to put all of your eggs in one basket. Pay the loan amount as soon as possible. Keep a track of the market and refinance, and finally maintain a good credit score.

Must Read: Important Things You Must Have While Applying for a Business Loan