instant business loan

Get Quick Approval for Business Loan – A Step by Step Process

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Running or starting a new business requires a lot of capital. The initial cost of setting up the infrastructure and operating for the first few months without a lot of profit are too hard to manage. Getting an instant business loan is very easy these days. Financial institutions offer personal loans for business at a very low rate of interest. If you are planning to apply for a personal loan, then the following step-by-step guide will help you in getting a quick approval. 

Step-by-step process for Quick Approval for Business Loan

  1. Understanding the Types of loan you want

There are different types of schemes available. Whether you want a term loan, a cash credit facility, an invoice discounting or you want to go for Government backed initiatives will decide the type of application you have to fill.

  1. Research

Doing an initial research online will save you a lot of time. You can choose the best scheme that is being offered by one of the best financial institutions and straightaway apply on their website.

  1. Importance of Credit Score

You should know your credit score and keep it higher than the threshold required to apply for a loan. A good credit score will ensure that your loan gets processed without any roadblocks.

  1. Collateral

Ask your lender if any collateral will be required for the loan. Prefer a lender which does not take collateral for a small amount of loan. Avoiding collateral will save a lot of time and the processing can be done very quickly.

  1. Documentation

If you apply for an instant business loan, then the entire application can be done through online mode. If everything is found in place, then the processing can be completed in the next 48 hours.

Follow these 5 steps to get quick approval of your personal loan.

Additional Read: 7 Benefits of Having an Online Presence for a Business

Top 5 Factors Affecting Your Business Loan Application

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Although there are a lot of factors that affect the approval of a business loan application, some factors affect most applications. Capital is essential for all companies to build, grow and sustain. You can smartly apply for business loan by checking the list of the five most common factors affecting business loan applications. It would let you get an edge over other applicants before applying for a business loan.  

  1. Maintain a healthy credit history/credit score
  2. Business plan and model of investment
  3. Type of business (Risk level of your business)
  4. Age and size of your business 
  5. Availability of assets and collateral

These factors are known to play a crucial role in the acceptance or denial of your business loan application. You can use a business loan EMI calculator to make sure you can pay off monthly EMIs of your loan, and your credit score does not get affected.

Conclusion:

Looking forward to these five factors can help you better understand the lender requirements. Remember that your credit score can have a considerable impact and thus make sure to clear all your dues and liabilities before applying for a business loan.

Additional Read: What Parameters Checked By Nbfc For Giving A Business Loan?

Here’s Different Types of Business Loans Available in India

Business loans are required for starting a new business, expanding an existing business, upgrade plants and machines, maintain capitals or to manage the cash crunch. Several bank and NBFCs offer business loans in India for finance your business expanses for small and medium enterprises if the borrower meets the eligibility criteria and has a good credit score.

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Different types of business loans offered in India:

  • Professional Business Loans 

Professional business loans are sanctioned to professionals like doctors, chartered accountants, and lawyers who have a good credit history. It is at the discretion of the bank and NBFC how much loan it wants to extend to such borrowers and in many cases, some kind of collateral security is taken in the form of property, government bonds, life insurance policies, etc. The professional business loans usually have tenure of 5-7 years.

  • Overdraft loans

Overdraft loans are normally sanctioned by pledging fixed deposits of the bank and NBFC. Depending upon the credit history of the borrower, cash flows, tenure of bank and NBFCing relationship and the repayment history of the business or individual promoter, the bank and NBFC approves a certain fixed overdraft limit. Based on the limit, the overdraft amount can be utilized and interest is charged by the bank and NBFC only on the utilized amount. This loan can be utilized in any manner as long as the principal and the interest are being repaid on time.

  • Working capital loan 

In a working capital loan, the bank and NBFCs sets a limit for the business to take a loan and the amount can be utilized in a specific purpose only, i.e. the working of the business and cannot be utilized in any other manner. This type of loan is sanctioned against the defined purpose and the plan of the business.

There are multiple other options when it comes to business loans. These vary from one institution to another, it would be really helpful if you talk to a few of them before deciding upon a particular one to get the arrangement according to your parameters.  

Additional Read: What Are The Types Of SME Loans Available In India?