Entrepreneurship is a dream that many wish to achieve. However, the groundwork that goes into making this dream a reality requires a lot of planning across one’s business model, staffing needs, financial requirements etc. Of all the above factors, availability of ready finance is the most important and critical to achieve success. So, if you are looking forward to establishing your own start-up, you will have to analyze the various financing options available to fund your business endeavour. There are a lot of benefits of business loan. But, before you dig into comparisons, there are certain things that you must take into consideration while applying for a small business loan. Some of those are mentioned below:
• Clarity of Vision
• Check your credit score beforehand
• Understand secured and unsecured loans
• Check the withdrawal and repayment option precisely
• Working capital loans
Clarity of Vision
For your fund request to be supported by a financial institution, It is essential that you have a clear idea about the purpose of availing the loan. Some of the purposes for availing a loan could be: hiring employees, getting new equipment, renting office space, etc. You must make a note of all such business requirements before applying for a business loan.
Check your credit score beforehand
A good credit score can boost your chances of getting a quicker loan approval. Additionally, it also affects the cost of borrowing by providing a loan at a lower interest rate. Therefore, before applying for a Bajaj Finserv business loan, you must have a clear understanding about your credit score. It is advisable that you regularly check your credit score to ensure that any mistakes / errors are rectified and a healthy credit score is maintained.
Understand secured and unsecured loans
Financial institutions provide both, secure and unsecured loans. Secured loans come with collaterals, which act as a security measure to protect the financial institution in case the borrower is unable to repay the loan. Whereas, unsecured loans are collateral-free loans and do not require a guarantor.
With leading Non-Banking Financial Companies (NBFCs) like Finserv MARKETS, it is possible for small and medium enterprises to avail a collateral-free loan. Easy online application process and quick approval are some of the added advantages with NBFCs.
Determine how much funding you require
When planning on getting a loan you first decide the loan amount required, it’s important to be realistic about how much you actually need. This includes the fees in the equation. Moreover, you don’t want to go through this process multiple times, ensure that you’re asking for enough money based on your requirements. Also, make sure you’re taking out an amount that you’ll later be able to repay on time or this might have a negative impact on your credit report. A bad credit report might block your way of getting loans in the future, so it’s best to avoid such situations at all costs.
Check the withdrawal and repayment option precisely
While you apply for a business loan, make sure that its repayment doesn’t lead to financial instability in the long term. Avail for a loan that offers you the best interest rates along with flexible repayment options. It is recommended to review the repayment terms carefully before applying for one.
Working capital loans
Out of the various business loans available, working capital loans are the most popular ones that can help finance the daily expenses of a small or medium scale enterprise. Apart from funding the day to day operations, working capital loans also act as a cash cushion for the business.
Read the fine print
Before signing any document you need to make sure you understand what you’re signing your way into. Not all loans are boilerplate, there are a variety of options out there, so look closely at the terms and conditions of the deal. You need to be aware of the payment structure of the loan: Is there a balloon payment at a set date? Is the interest going to amount to more than the principal amount over the loan tenure? Are there origination fees or any early payment penalties? It’s best to look out for any such factors and thoroughly consider them before taking on any debt.
Online application, flexible repayment options, and minimal documentation are some of the other key benefits of availing a Bajaj Finserv Business Loan from Finserv MARKETS. All these features and benefits provide Finserv MARKETS an edge over other financial institutions in the market. Now that you are aware of all the important things that you must consider before applying for a business loan, you must make the right choice and settle for a loan that best suits your needs.
“Finserv MARKETS, from the house of Bajaj Finserv, is an exclusive online supermarket for all your personal and financial needs. Loans, Insurance, Investment, and exclusive EMI store, all under one roof- anytime, anywhere!”