External financial assistance is usually required while you are establishing a new business or expanding an existing one. You may require financing for a whole host of reasons, ranging from the need to meet working capital costs to revamping and upgrading your infrastructure.
To avoid a financial crunch while taking care of the aforementioned requirements, planning proactively and opting for a business loan from a credible lender can prove to be the smart choice.
India is home to a plethora of lending institutions like banks, NBFCs (Non-Banking Financial Companies), and other private lenders. In order to choose a reliable and suitable lender to meet your business’ financial needs, one needs to take a number of factors into account.
With the advent of online lending solutions, it becomes relatively easy for borrowers to compare lenders on various parameters and ensure they make the right choice.
Here are the various aspects one must consider while comparing business loan lender:
1. How Smooth is the Business Loan Application Process?
To avail of a business loan, most lenders would require that you fill in a business loan application form. You would need to supplement your application with documents like identity proof, bank statements, a business plan, etc.
When evaluating lenders, one of the first and foremost questions you must ask is this: is the application process easily accessible to me, the lender? Is it streamlined and customer-friendly?
Opt for a lender that has a readily accessible online application process that can be completed any time, anywhere. Ensure that your lender provides speedy and seamless application processing services and quick loan disbursals. The lesser the documentation required by the lender, the smoother the application process. Ensure that minimum documentation is needed and that you can easily meet these requirements.
2. Business Loan Charges
Interest rate, processing fee and the taxation
These charges include the interest rate, processing fee and the taxation over the loan that you want to avail. All these factors put together amounts to the total cost at which a lender will provide you with a business loan. To ensure that you find the best business loan lender, it’s important for you to understand the scope of all possible fees and charges that might be levied. The cost should be stated in a transparent manner to you in the agreement and should be decently priced. At Finserv MARKETS, business loans can be availed at interest rates attractive as 12.99% per annum. All other fees and charges are clearly defined and levied in a completely upfront manner.
Foreclosure charges and late fee fine
Banks and online lenders can charge a late fee or penalty amount upon delay in repayments. While comparing business loan lenders, notice the types of penalty charges that are applicable if you default on your EMIs.
A few lenders also levy charges if you foreclose your loan. Keep an eye out for such charges. Ideally, you should opt for a lender that offers you the benefit of foreclosing your loan amount without any additional charges.
3. Reputation of the Lending Institution
While you are at it, study how the different lenders have been reviewed by their customers online. This will provide you with a genuine understanding of the lender’s reputation amongst the loan borrowers. If a business loan provider has consistently positive reviews from customers and clients online, this implies that the lender is a good option to reach out to for your business loan requirements. You should also actively reach out to business associates and acquaintances who have opted for business loans in the past.
4. Payment Process
While certain lenders may accept a physical cheque for loan repayment, most banks and NBFCs accept NACH-facilitated transactions, which requires withdrawal of money from the business bank account at the said date. Not only does this help maintain a record of the payment, but it also makes the payment process hassle-free.
5. Business Loan Eligibility Criteria
Every lender will have a predefined set of eligibility criteria. You should go through these terms and conditions thoroughly to see if you meet these criteria. The business loan eligibility criteria will generally require you to be a salaried individual and an Indian resident. You would also be expected to fit into a particular age bracket.
Other important factors to consider are the repayment tenures the provider offers you and the kind of collateral required by the lender to approve the business loan application. Take into account all of the aforementioned factors to zero in on a lender. You can also consider the Bajaj Finserv Business Loan on Finserv MARKETS. You can avail a customized business loan online with a flexible repayment tenure ranging from 12 to 60 months for a hassle-free experience.
Be it a startup loan or an MSME business loan, on Finserv MARKETS, you can avail instant business loans of up to INR 30 Lakhs with zero collateral alongside value-added benefits in the form of a Financial Health Report to keep track of your creditworthiness.
Finserv MARKETS, a subsidiary of Bajaj Finserv, is a one-stop digital marketplace that has been created for consumers on the go. It offers 500+ financial and lifestyle products, all at one place. At Finserv MARKETS, we understand that every individual is different. And that’s why we have invested in creating a proposition – Offers You Value. A value proposition that ensures you get offers which are tailor-made for you. We also offer an amazing product range and unique set of online offers across Loans, Insurance, Investment, Payments and an exclusive EMI store. Be it in helping you achieve your financial life goals or offering you the latest gadgets, we strive to offer what you are looking for. From simple and fast loan application processes to seamless and hassle-free claim-settlements, from no-cost EMIs to 4 hours of product delivery, we work towards fulfilling all your personal and financial needs. What’s more! Now enjoy the same benefits in just one click with our Finserv MARKETS App.