Whether it is a new business or an existing one, it always requires funds to grow. For extending assistance to the business owners, many banks and financial institutions offer Business Loans. Business Loans are provided for different tenures ranging from working capital loans, intermediate term loan or long term loan. Business loan can be used for expansion of your business, for setting up a new unit, for purchase of inventory/ equipment for business, for increasing working capital and so on.
Lenders offer a wide range of business loans to cater to different needs of business owners with flexible business solutions. You have to keep in mind few important things while selecting your business loan lender. These important things include low interest rate, required tenure, flexible EMIs, door step service, fast processing, quick disbursal and minimal documentation.
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It looks very simple to get a business loan but it is not so simple in real life. If you want that you won't have to face any problem in applying for and getting your business loan, you need to follow below mentioned steps:
Step 1: Clarity of Purpose of getting a Business LoanIt is the very first step of the Business Loan Process that you must be very clear about the cause behind applying for the business loan. There can be several purposes for which the business loan is applied for. There may be need of business loan for short term such as working capital need or cash credit facility such as managing day to day expenses. The period of getting business loan can be of Long Term, for which Term Loans are offered by the lenders for example you require business loan for purchase of capital asset/ machinery for business, business expansion, etc.
You need to know in advance as to why do you need the loan and about the utilization of loan amount.
Step 2: Determine Business Loan AmountYou have to analyze thoroughly and calculate the loan amount requirement very carefully after going through all the facts & figures. It is to be kept in mind that no point is getting missed while making financial calculations.
Step 3: Decide the type of Business Loan that is fit for your businessThere are various types of business loans provided by the lenders which are even tailor made for specific business. Some of the examples of such loans are start-up loan, SME loan, MSME loan, Term Loan, Cash Credit Facility, Working Capital Loan, etc. You are required to find out as to which among them, is a right fit for your business.
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Step 4: Select the type of Business Loan LenderThere are various types of lenders available in the market who offer business loan. These lenders can be commercial banks, NBFCs, micro finance companies, private lenders, peer-to-peer lender, etc. The loan can be secured or unsecured. Traditional Business Loan offered by Commercial Banks may require more documents and may have stringent eligibility criteria.
Step 5: Choose the Best LenderAfter selecting the type of lender, now choose the best among them. For this purpose, you need to consider various points such as minimum interest rate, tenure, facility, security, repayment schedule, loan amount, complete transparency, etc. Some of the lenders also provide door step services so that you can apply for it from your home or business location. Some lenders offer quick disbursal of loan.
Step 6: Remain prepared with Business Loan Eligibility RequirementsAfter above steps, the sixth step is to be prepared with the following:
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Step 7: Keep all your Documents ready for Business Loan ApplicationThere is extensive paperwork involved while making business loan application which required multiple documents and these may vary from lender to lender. You may ask for the checklist of documents required from the lender where you want to apply for business loan and keep all the documents ready in advance.
Step 8: Fill up Business Loan Application Form to the LenderThe next step is to fill up the business loan application form completely and attach all the required documents with it and submit it to the lender.
Step 9: Have patience till the approval of Business Loan from the LenderThis is the last step of the process that you need to wait with patience till your business loan application is processed by the lender and loan is approved. In case, something remains incomplete then the lender may ask for the same from you.
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