How to Get Your Small Business Loan Request Approved Swiftly

Whether you need to set up a new manufacturing unit or workspace, buy important machinery or inventory, fuel working capital, or ramp up production by hiring more staff, a business loan can offer required funds quickly and conveniently.

However, depending on the type of loan you apply for, the eligibility criteria differ.

Qualifying for these can help you secure funds fast and meet critical deadlines that can boost your business revenue.

For instance, if you’re applying for a secured business loan, you need to ensure your collateral has a good value and is free from ownership disputes.

The terms change when you apply for an unsecured small business loan, and here’s how you can enjoy swift approval on it.

1- Find a lender who moves quickly

While there are a lot of banks and NBFCs who can finance you with a loan to start a new business, it is up to you to identify the right lender.

When your business needs are urgent, say an opportunity for expansion or a good deal on bulk purchases that you don’t want to miss, choosing a lender who works efficiently and quickly is a boon.

Apart from competence in disbursals, look for features that suit your business model. For instance, if you can’t predict the exact amount of funds you need, and may require frequent infusions of cash, you can rely on a Small Business Loan.

This facility allows you to borrow many times from the amount sanctioned to you and pay interest only on what you borrow.

Additionally, if you can only repay the loan when you receive payment from clients, you can choose to pay interest-only EMIs with the principal repayment at the end of the tenor. A flexible facility like this can transform your borrowing experience for the better.

2- Meet all the eligibility criteria

The next thing to do is to ensure you qualify for the business loan of your choice as per the terms of the lender. Since this differs from one city and lender to another, ensure you do your due diligence.

Not meeting this criterion can result in an automatic rejection on your application and be a waste of time too.

They offer loans to business owners between 25 and 55 years of age with a business continuity of at least 3 years and require you to have filed IT returns for at least 1 year.

Simple terms that are easy to meet ensures you can focus on your work instead of on a business loan application.

3- Showcase past experience with credit and a good score

While a credit score requirement is not listed by most lenders, it is check undertaken by them to ensure you are not a credit risk. So, it is important for you to have a credit history, either with credit cards or other loans, and to have a high score of around 700 which is based on timely repayment, a low credit utilisation ratio, and experience with a mix of credit.

With no credit history, you may not be able to secure a sufficient loan amount and with a bad score, lenders may not offer you favourable loan terms.

To enjoy a nominal interest rate on your business loan, get the loan amount of your choosing, and benefit from top-notch features, ensure your credit score is up to the mark. If not, give yourself 6 months to build it and then apply for a business loan. 

4- Get the documents ready before applying online

The next step to expedite business financing is to get your documents in order. Every lender will verify your application with relevant business loan documents such as your business incorporation certificate, GST registration, bank statements or Profit/Loss statements as well as personal documents such as ID and address proof.

Keeping them ready will help you submit them as soon as your application is approved. Here again, selecting a lender who requires minimal paperwork is key to an easy and fast experience.

The best way toapply for a business loan quickly is online, as you can do it on the go and at your convenience instead of making an appointment with the lender’s representative or visiting a branch.

5- Have your business plan ready

The last step to actually receiving the loan agreement and signing it to get funds in the bank is either a face-to-face or telephone conversation with your lender’s representative.

By acing it, you can ensure your application is approved, negotiate for favourable terms, and can explain any shortcomings too.

Here, you need to have the details of the scale and scope of your enterprise, explain why you need to borrow capital finance for your new or existing business and how they will help you generate profits.

Lastly, you need to have a repayment plan in mind. You can use the EMI calculator to estimate your EMIs to have a more rewarding discussion.

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