small business loans

What Are The Steps To Get A Small Business Loan?

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Since every business is different, the types, terms, and conditions for the loans vary widely. If your business requires a small business loan, you only need minimal paperwork to avail easy repayments, and attractive interest rates.

Here is a guide for you to understand how to apply for a small business loans:

  1. Understand the requirement: You need to understand your affordability before you apply for a loan, when you need money for short-term needs, estimate your affordability by considering factors like the loan amount, loan term, interest rates, and monthly payments. You need to understand how much capital you can have to fulfil your debt.

  2. Understand Eligibility: It is important to compare various lenders offering small business loans and their eligibility conditions. If you meet the eligibility conditions of a particular lender perfectly, you may be eligible for a loan of a high amount with a low interest rates.

  3. Fill in the application: Most lenders, like Fullerton India, offer online application and disbursal of unsecured business loans. You can submit your application along with required documents online. The lender will get in touch with you to take the process forward. The amount will be disbursed to you electronically upon approval.

Additional Read: 6 Reasons why Small Loans are Good

4 Reasons Unsecured Business Loans Are Getting The Popularity That They Deserve

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Business loans are popular financial instruments. However, getting one isn’t as straightforward as you need to set aside the business plan, financial model, and other relevant documents, provided you are resorting to a conventional approach. However, if you are starting out and do not have collateral to offer, there are several unsecured small business loans to rely on. 

Here are some of the reasons why unsecured small business loans are more popular than the ones procured via the traditional channels:

  • Access to a Sizable Credit Line

An unsecured business loan is more like a high-value personal loan, dependent on the income and credit score. Therefore, if the mentioned metrics are in good health, you can get access to a decent financial consortium to work with.

  • Quick Access Loans

Unsecured business loans are meant to be hassle-free. This is why it is easier to get one in the least possible time and with minimal documentation.

  • Customizable Selections

Loan providers understand the complexity and diversity of business models and ensure credit line customizability to suit the nature of the setup. This means you can either opt for the cash to run the business or even apply for a working capital or machinery loan, as per convenience.

  • Favorable Conditions

This aspect hints at the fact that the unsecured business loan interest rate might be higher but is still lower than the credit cards. Besides, the concerned NBFCs ensure that you get hold of easy repayment schemes to keep the financial sanctity intact.

These are some of the more important reasons that make unsecured business loans highly popular for smaller businesses. 

Additional Read: Applying For a Small Business Loan? Here’s What You Should 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.

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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