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Everything You Need To Know About Business Loans

By Finserv MARKETS - Jul 6,2019
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Whether you’re looking to expand your services, hire help or upgrade equipment, having funds at your disposal is important for the survival of your business. Here’s where business loans come into the picture.

The number of startups in the country have been gradually on the rise. Around 7200 startups came up in 2018 alone, according to NASSCOM with the help of business loans or investments.

There are 17 types of business loans. Some of them include Personal loans for startups, nonprofit business loans and among others.

Now whether you get a business loan or not depends on several factors. These are –

Credit history and score

Lenders take into account your credit history and score before deciding whether or not to approve your loan application.

Financial performance

Established businesses have to furnish documents detailing how the enterprise has fared financially and what are the future plans.

Collateral

Lenders also need collateral from your side, like a house for example, to provide loans so they can take ownership of your house if you fail to repay the loan

Insurance information

If you have insurance, information on that needs to be provided so that the lender gets a better idea of your business and financial history.

Apart from all this, the banks also require a personal guarantee from your side in the form of a signed document.

Now that we’ve looked at the factors that come into play when applying for business loans, let us take a look at what the lenders require in the form of documentation for approving a loan.

  • Statutory legal registration of the company

This is the registration document the company signs.

  • Financial statement of the company

The bank statements of the company for a particular period of time.

  • Income tax returns

IT returns to ensure there is no fraud.

  • Previous Loan track

Lenders also look at your track record of previous loans to check your payment patterns or if you have defaulted earlier.

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Bajaj Finserv Direct Limited ("BFDL"), erstwhile Bajaj Financial Holdings Limited is a registered corporate agent of Bajaj Allianz Life Insurance Company Limited and Bajaj Allianz General Insurance Company Limited under the IRDAI composite registration number CA0551 valid till 10-Apr-2021. BFDL also renders services to Bajaj Finance Limited (‘BFL’) and Bajaj Housing Finance Limited (‘BHFL’) (referred hereinafter as ‘Lending Partner’) in sourcing of customers, providing preliminary credit support activities, fulfilment services and post-acquisition customer services related to lending business. Registered Office: Bajaj Auto Limited Complex, Mumbai – Pune Road, Akurdi, Pune – 411 035 CIN: U65923PN2014PLC150522