How to get a business loan in 5 simple steps

by Finway FSC Empowering People Financially

It is often necessary for business owners to seek out a business loan in order to expand or sustain their business, but it isn’t always easy to get the desired credit at the desired time. Especially, if you are an entrepreneur and you’re going to a bank for availing a business loan in Delhi, you might have to wait for an additional amount of time. On the other hand, fintech companies and NBFCs disburse loan rather quickly, within a span of two to three working days and are therefore emerging as viable alternative to banks. These companies also offer home loan in Delhi besides the usual business loan and loan against property.

However, it is important for business owners to know the right procedure for availing loans and they must also be aware of all the pitfalls in advance, to ensure that nothing unprecedented or undesirable happens later. Let us take a look at 7 simple steps that you can take to avail a business loan in Delhi or other metro cities of the country.

Calculate the amount you need precisely

Every penny that you borrow, you will have to return with interest. So make sure you borrow precisely the amount you need. You can assess your needs in detail and then decide on a borrowing amount accordingly. Knowing the amount of debt that you want to take will allow you to compare different types of loans and you’ll be able to find the one that suits your needs the best.

Do a comparison between different loan types

There are a number of options when it comes to choosing the type of business loan. There are some that are collateral free, while there are others that require you to pledge your asset as collateral. There are a number of factors that you must take into account while deciding on a business loan; some of them include, interest rate, tenure, terms of eligibility and lending, requirement for collateral etc.

Choose the correct lender

There are basically two types of lenders in India – banks and NBFCs (Non-Banking Financial Companies). Banks have been more trusted in the past but they are slow to disburse loans and have high standards regarding the credit record of the applicant. NBFCs on the other hand, can leverage financial technology and disburse loan in a shorter amount of time and often at a reduced interest rate as compared to banks. So you need to take all these factors in account before you decide on the institution where you’d be availing the loan from.

Have the necessary documents at hand

The entities that offer loans calculate the credit worthiness of the borrower by studying various financial documents. However, the extent to which the investigation is made into your financial history may depend upon the loan product and the amount of loan that you’re looking to withdraw. Usually, the business documents that are required include financial and bank statements, tax returns, and documents relating to the business for which the loan is being availed. Therefore, you must study all the documents beforehand and must have them at the ready as and when they are asked for by the lending institution.

Understanding the application process

Many NBFCs and fintech companies have switched to a totally online format, with zero human intervention. You can submit your application online without having to go through the hassle of visiting the banks and standing in long ques. The online process is faster and more efficient and this is perhaps, the reason that it is catching up so quickly. Therefore, it is important for you to understand the application process thoroughly so as to ensure that your application doesn’t get rejected simply for the reason that you didn’t follow the right protocol.