Owning a property of your choice or driving a car of your dream is now just a step away. With easy access to loans, people around the world can bring happiness and comfort into their lives. While home loans and car loans fulfill our domestic requirements, business loans can immensely help realize our entrepreneurial dreams. A small business loan provides financial stability to budding business owners and gives ‘wings to their dreams’.
Loans help small businesses climb the corporate ladder and establish themselves in the market. However, the procedure to apply for a business loan can prove to be stressful and confusing. Therefore, to help you rightly invest your money and time, here is a list of things to do before applying for a business loan:
1. Have a clear idea of your whys:
Evaluate your decision to take a loan. Is it because you want to buy new equipment? Is it because you’re looking to hire? Are you planning to expand? Once you answer these questions clearly, the process becomes easier.
2. Research on the available lending options:
While looking at the lending options, screen out the ones that do not match your needs of taking a loan. If you need a short-term loan, then focus only on the ones that can give you quick cash at a low rate of interest.
3. Check the tenure of the loan:
When you apply for long-term business loan, you will have to pay less EMI. But, you will end up paying more in the end. In case of short-term loans, the EMI will be high. Make sure you read the documents well before taking a loan. At Finserv Markets, you can have complete control on repayment of principal amount.
4. Make a business plan:
While making a business plan, list down your company’s past achievements and future goals. As the lenders review this, make sure it makes your business look reliable. Only then, can you expect the lender to consider loaning you the money.
5. Prepare financial statements:
Before you ask the lender for money, keep a strong check on your financial expenses. Provide the statements of these expenses to your lenders. This helps them to get an in-depth idea of your businesses’ expenditures.
6. Prepare documents in advance:
Apart from the basic information about the financial reports, keep the other documents handy. These documents include business license, lease of property and proof of ownership.
7. Check your affordability:
Before you apply for a loan, sit and calculate your businesses’ spending, internal expenses and liabilities. This will give you an idea of how much money is needed to repay the loan debts.
8. Understand prepayment terms:
If your lending options include banks, read about the prepayment terms of the bank. Prepayment is an instalment payment you have to make to the bank before the due date. A prepayment can either be for the entire balance or an advance made for an upcoming instalment. Make sure you have an idea whether prepayment is compulsory or not for the bank you choose.
9. Study about the penalty charges:
A business owner knows well about the turn of events in the market. Before you apply for a loan, check the penalty amount it asks for in case you fail to return the amount in time. You may want to go for a loan that does not have a very high penalty charge.
10. Present your case effectively:
When you meet a lender, make sure you go fully prepared. Along with all the important documents, make sure you present your ideas clearly. Your business plan should appear effective and profitable.
Loan procedures can be hectic. But spending a good amount of time in researching and studying to find a suitable loan for your business can be fruitful. Bajaj Finserv Business Loan Finserv Markets provides its customers with features such as flexible tenure, attractive interest rates and a host of benefits of business loan. So why wait? Contact us today and kick start your entrepreneurial journey with us today!
“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 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.”