Business funding is important for every organization. Whether you are a startup or you want to grow your business further with new infrastructure or resources, you need sufficient funding. There are several methods for business funding, such as:
– Bank loan
– Angel Investors & Ventures Capitalists
However, what is the main means of obtaining funds? Business loan from bank or from other borrowers. You can apply for business loans from government, private banks or NBFCs. But before applying, you have to understand that every lender has different criteria for qualifying for a small business loan. However, there are some basic requirements, which you have to fulfill.
Basic qualifications to get a loan in India:
– Age limit: The minimum age of the applicant should be 21 years and maximum 65 years.
– Income: Business should be in profit for at least last 2 years.
– Turnover: The minimum annual income of the company should be Rs 15 lakh.
– Co-applicant: This is an optional clause for the applicant. This is not mandatory in the case of business loans.
Basic qualification for business loan
– The organization has an established business and it has been more than 6 months.
– Minimum turnover of business in the last three months should be Rs 90000 or more.
– Business is neither blacklisted nor excluded from the list of SBA Finance
– The location of the organization should not be in any wrong place list.
– The business which is applying for SME loan should not be a trust, NGO or charitable trust.
Basic scale of NBFC loan eligibility
– Last year’s sales should be more than 10 lakhs.
– Last year’s ITR should be more than 1.5 lakh rupees.
– Any house or business premises should be in the name of the business owner.
– Business has been done for two years.
– Business space and home should be different.
Now we have come to know the basic merit of small business loan, so now we know how we can apply for business loan. There are two ways to apply for an SME business loan – offline or online.
When you apply for an online business loan, keep in mind these 5 steps. After this, you will be one step closer to acquiring funds.
Decide why you need a business loan
This will be the first question the lender will ask you. You have to specify your need for SME loan. Hopefully your answer will be within these categories.
– Buying raw materials or inventory
– Buying machines or equipment.
– To increase or expand the infrastructure.
– Increase team or hire staff.
– Marketing or advertising expenses
– Repay other business expenses.
Calculate Cheap Credit Limit
When you apply for a business loan, you should review for what purpose you are taking the loan. By doing this, you will know how much loan you have to take. So you can apply for the amount you can pay. Taking too much debt will put a burden on you, while taking less will not miss opportunities.
Decide which business loan is right for you?
This is not an old time, where there was only one local bank, which used to give SME business loans. Today the finance market is full of options. However, from this sea of lone, you have to extract the pearl (loan) according to your need. Different types of loans that you can choose.
– Bank loan
– Medium term loan
– Short Term Loans
– Business Line of Credit
– Invoice Financing
– Machinery Loan
Once it is decided which loan you will take, then see from where you will take a business loan – bank, NBFC, non profit micro lender or online lender.
How to know the eligibility for a business loan
After the loan amount and the lender has been decided, now it is to find out whether you are eligible for the loan or not. If you want your loan application to be passed on to the lender, then you have to fulfill all the requirements.
After exploring all the options of eligibility and small, medium and small (SME) loans, you have to submit the documents that the lender has asked for. The basic documents are:
– Business and personal tax returns
– Business and personal bank statements
– Business Financial Statements
– Business legal documents such as Articles of Incorporation, Commercial Lease, Financial Agreement)
If you are applying for a business loan online, just follow the 3 easy methods and you will get the loan easily. These methods are: –
Apply online: Go to the website of the lender you want to take a loan from. Apply by filling out a small business loan application. Their representative will review your SME loan application in a few hours.
Submit the required documents: After applying online for a small business loan, you will be asked to submit the required documents in the form of PDF.
Get an easy business loan: After passing through your application and documents, the lender will check your eligibility according to their procedure. As soon as you are proved worthy, your loan will be approved.
So it is quite easy to get a business loan nowadays. With few steps and the right documents, you will get a loan for your business.