If problems related to inadequate cash flow are keeping you away from setting up your new business, a business loan is your only remedy. Not everyone is capable of funding one’s own business, and it is absolutely okay to take refuge in business loans for starting a new business.
However, getting a business loan approved is not as easy as getting a personal loan approved. Since a business loan involves release of a huge sum of money, lenders conduct a thorough scrutiny before releasing a business loan.
Sometimes, you may also need to offer security or collateral to get your business loan approved. There are a few banks that offer quick business loan for new businesses which ranges from 3 lakh rupees to 2 crore rupees, with added advantages of minimal paperwork, flexible repayment options and superfast loan disbursal!
If you want to make sure that your business loan is approved at the very first go, take a look at the following steps which can prepare your organization for a business loan.
Table of Contents
Build a Solid Business Plan
A comprehensive business plan is your stepping stone to getting a business loan approved. Your business plan must give clear insights about your business vintage, stability, creditworthiness and other associated strengths so that lenders can assess your repayment capability and trust you with a huge amount of money. Address in your business plan some key questions such as:
- Why are you applying for a business loan?
- How do you plan to use your business loan?
- Who are your suppliers?
- Who are your creditors?
Take Special Care of your Financial Statements
Accurate financial reports and records speak volumes about your business health. Lenders assess this piece of information critically to understand the income and profit-earning capability of the business. So, ensure providing correct details of your company balance sheet, purchase records, etc. If your company has stakeholders, you must furnish their financial records too.
Furnish Other Channels of Financing
Depending solely on a business loan for catering to all the requirements of a business gives out an idea that you are completely dependent on the bank for your financing needs. In such cases, there might be a hesitation among lenders on approving your business loan. So, make sure you state your other means of financing clearly to your lender. For instance, if you have a business partner raising finances from elsewhere, your chances of getting a business loan approved are higher!
Time of Business Loan Request
When the economy is booming, getting a loan approved is a lot easier. But in times of recession, lenders hesitate on releasing lump sum amounts as business loans. However, your business loan approval depends on the area of business you are in, and based on a market analysis, your lender shall calculate the interest rates and other charges on your loan amount.
Do not compromise on taking your business growth to newer levels of success. If a business loan can solve your monetary hurdles in business, apply for a business loan and get a quick approval on a business loan for your new business.