Articles

How to Get a Small Business Loan Easily

by Pawan Yadav Blogger

Today, there is an increasing demand for sme business loans among the vast masses of the country. And why not? It is true that small and medium enterprises need a significant amount of financial aid and support to grow - especially among the large MNCs and organisations as they are already financially ahead and well-established. However, SMEs are the backbone of Indian economy and strongly need proper support to grow. To sway away the problems faced by SME owners due to financial responsibilities, small business loans have emerged and have become vastly popular among the industry.


Business Loan

There are a variety of reasons why SME owners usually opt for sme business loans - whether it’s starting a large project, recovering from losses, expanding operations, or advancing to latest equipments and tools. It is essential for SME owners to adopt an optimal process of using their resources and finances - considering the existing competition in the market. Acquiring quick business loans would help entrepreneurs finance various aspects of their business in a smooth way.

Business loans are essential in the process of boosting a business and are generally easy to obtain - given the fact that there are many lenders willing to partner with SME owners who have a good credit score, stable income, and a secure business strategy. If you are looking forward to get a business loan for expanding your business, make sure to calculate precisely how much funding you’ll be requiring and if you can make timely payments on that or not. For this, use a business loan calculator - as it also makes sure that your finances don’t get disturbed majorly in the process of repayment of the loan.


How to get a business loan


While different banks have different requirements, below are some basic documentation that is required:


  • Last 6 months/year balance sheets, income statements, and current financial statements.

  • Accounts payable and accounts receivable

  • A profile of the company and products

  • Profit and loss statements

  • Identity and address proof


Following is the basic criteria for getting a SME business loan:


  1. Credit history of the borrower: The credit report of the borrower needs to be updated and accurate. When a borrower has a good credit history and score - ideally, above 750 - then the financial institution would be in favour of them and availing a loan would be much easier. This is one of the primary things that financiers check before approving or rejecting an application.


  1. Business plan: A robust business plan is one of the key determinant in acquiring a business loan. Any lender wants to be convinced that the business plan is sound and has the potential to be successful. Any financier would want to be ensured about the overall plan including all estimates, operation outflow, and marketing assets. Furthermore, they also need to ensure the borrower’s capacity to pay off debts.


  1. Business feasibility: The borrower needs to make a profit and loss statement for up to a year at least - in most cases - and has to follow industry standards in doing so. Furthermore, borrowers also have to prepare a detailed pro-forma statements, and this has to include projections to aid the financiers gauge the feasibility of the execution plan or strategy.


Many NBFCs like Clix Capital are offering quick business loans with minimal documentation and flexible repayment plans. SME business owners now have the amazing opportunity to avail such loans and effectively sustain their ventures.



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About Pawan Yadav Advanced   Blogger

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Joined APSense since, May 29th, 2017, From Gurugram, India.

Created on Nov 29th 2018 02:37. Viewed 519 times.

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