Nowadays, getting a business loan is easy and convenient with a simple online process. However, before you apply for a business loan, there are certain aspects that you should be aware of. The Do’s and Don’ts mentioned below can make your loan application process smoother along with helping you get the best deals to finance your business.
1. Be prepared with your plan and documents
Before you approach a lender for a business loan, do your homework. Have your business plans ready with the all the necessary documents and financial statements. You are more likely to get the best deals when the lender has confidence in your vision and management abilities. Do a research about the areas you would invest the loan amount in and the benefits it would bring to your top line and bottom line objectives.
2. Compare lenders and their features
Before you approach a lender, always compare product from different lenders available in the market Along with banks, an Non-Banking Financial Company (NBFC) like Finserv MARKETS also offer a business loan with attractive features and benefits. Look for specific features that would benefit your business best suit your needs. You can compare the lenders in terms of interest rates, prepayment charges, pre-closure penalties (if any), terms and conditions, tenure as well as flexi repay options.
3. Borrow the right amount at the right time
It might be difficult for you to plan your business growth if you underestimate or overestimate the amount of capital you need for it. Before applying, do your calculation and accordingly decide the quantum of the loan. Two ways to do this include – budget review and financial forecasting.
Similarly, the timing of availing the business loan is also important. If you borrow funds late, your business can go through financial pressure, or if you avail a loan early, you will have to pay interest charges unnecessarily.
Other important aspects include: checking your credit score as the same is an important factor of business loan eligibility criteria. Having a low credit score does not mean that you cannot be granted a loan but having a healthy one does increase your chances of quicker approvals. Please note that your credit score will be slightly impacted during the loan application process as the loan officer will need to extract your credit score which is also known as a “Hard Inquiry”
1. Do not apply with multiple lenders
Refrain from applying for a business loan with multiple lenders all at once. This can show you as credit hungry and can affect your credit score adversely.
2. Do not fall for lenders offering low interest
While you look for a lender for your business loan, don’t fall for lender offering lower interest. Consider all the factors that determine a good business loan. You can look for a business loan with low pre-closure charges, transparency in cost, easy eligibility, minimum documentation, quick disbursement of the loan, easy application process etc. To know more about business loan and its features with Finserv MARKETS
3. Don’t pay back too fast
Though it is important that you pay back the debt as early as possible, pumping out funds from your business in its incubation phase might be detrimental for its growth. Even for foreclosure, you could instead wait for the time when your business starts generating revenue so that it has enough funds to handle the low phase if any.
Often small mistakes lead to a bigger consequence. Knowing the dos and don’ts before you start the business loan application process can help you take maximum benefits of business loan. The requisite of availing a business loan at the best possible terms is to have adequate knowledge about your business prospects and the loan options available.
Looking for a business loan? Look no further, with Finserv MARKETS, you can avail a Bajaj Finserv Business Loan in an easy, quick and hassle-free way. What’s more? There are plenty of features like Low EMI, flexible repayment options, instant approvals etc. that you can benefit from. So why wait? Apply for Bajaj Finserv Personal Loan with us, today!
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