Courtney C. Lipsey Business loans are needed by businesses to meet their operational, working capital requirements, capex, and administrative needs. No matter if the company is expanding, new, or established, any business is seeking funding. These funds are essential for the smooth operation of companies as you cannot depend on your financial resources constantly. Before you decide to apply for business credit, inform us about the different kinds of loans for business, their features, eligibility requirements, and much more.
Eligibility Criteria For Getting A Business Loan
- The owner/applicant must be between the ages of 21 and 65 years old.
- The company must be operating for a minimum of two years.
- The applicant is required to be in manufacturing, trading, or providing services.
- These loans can also be accessible to self-employed professionals, such as Doctors, Chartered Accountants, and Company Secretaries.
- The minimum revenue will differ depending on the lender. The business must have a minimum income of Rs 10 lakhs to qualify for an enterprise loan.
Factors Affecting The Eligibility For A Business Loan
Credit Score
A credit score plays an important factor when it comes to determining the creditworthiness of a potential borrower. It is a complicated measure that is determined by looking at the amount of outstanding debt, such as repayment history, income, and so on. Credit scores are reported as a percentage ranging from 300-900. When you score more than 775, your score is considered to be good and is likely to qualify for loans when needed. Anything less than 600 is regarded as an unfavorable credit score that should be handled with care, and lenders may have higher interest rates or require collateral.
Credit Standing
The prompt payment of loan payments is among the main factors in determining the credit rating. The lender will assess your standing and relationship when handling your current business loans. If your account is regularly settling principal and interest commitments in the order they become due, your chances of receiving a business credit with favorable interest rates are greater.
Business Growth
It is interested in your company’s performance in relation to revenue and liquidity. The performance of your business over the past three years regarding the growth of turnover and the increase in customer base will be taken into consideration before approving a loan for business.
What Are The Documents Required For Getting A Business Loan?
The documents required for obtaining an unsecured business loan may differ in accordance with the nature of the business.
How To Apply For A Business Loan?
- Select the kind of loan and the lender you want to apply to.
- Visit the official site of the lender to apply online.
- Choose the product you wish to use.
- Give basic information like Name, age, address, Mobile Number, and the constitution of the business, for example.
- Fill out an application. The representative of the lender will be in contact with you to further process the application.
- Visit the branch of the lender physically and complete the loan application along with the supporting documents required. The loan is approved upon a thorough review of the application as well as supporting documents.
- Certain lenders provide convenience banking, where the loan processing can be completed in the comfort of your own home. You can take advantage of this service to receive instant business loans.
It is also possible to go to Credit Mantri to learn about the various commercial loan offerings on the market and to verify the eligibility requirements for a particular loan.
- Take a look at the different commercial loans available
- When you’ve selected the loan that you’d like to apply for, click ‘Check Eligibility.
- You will be taken to the app page.
- Fill in the basic information required and then click “submit.”
- Enter the OTP you received on your mobile phone and be aware of your ability to use it.
Conclusion
Business loans can assist your business in navigating through difficult times. Your credit score, your good standing in the industry, and your strong relationship with financial institutions could help in securing loans with attractive rates. Make progress on long-awaited business plans and get easy financing.
