A business loan can help you to obtain the funds required to grow your business, meet daily expenses, and buy inventories to increase production. However, if you are keen to apply for a business loan but do not know where to begin, keep reading this article to find out how to get an instant business loan offline or online.
How to Get a Business Loan Easily in 6 Simple Steps?
Follow these simple steps mentioned below to get a business loan quickly:
Step 1: Create a business plan
Develop a proper business plan before approaching a financial institution to get a business loan. This is a crucial step as several lending institutions require you to have a solid financial plan summarising the type of business you operate.
Your business plan must include your business’s mission, goal, and operational strategy to meet its stated objectives. This will create trust in the lender and allow him or her to approve your application for a business loan.
Step 2: Determine the usage of a business loan
A financial institution may ask you how you want to spend the borrowed funds. So, if you want to buy equipment, you must apply for equipment financing. On the other hand, if you are facing a sudden cash crunch and wish to cover the daily operational expenses, you may apply for a working capital loan.
Thus, stating the purpose behind your business loan application will help financial institutions determine the type of business loan you need. It will also assist them in understanding whether the loan amount will meet your requirements or not.
Step 3: Decide the required loan amount
Determine the amount of business loan you require. This will help you to avoid overestimating or underestimating the credit amount you need. If you overestimate, it will lead to financial waste and an unnecessary debt burden.
On the other hand, if you underestimate the loan amount, there will be a shortage of funds, and you will fail to meet your stated business objectives.
Step 4: Assess your eligibility
Lenders usually consider the following parameters while sanctioning a business loan:
- Credit score
Check your business and personal credit scores as it indicates your financial ability to repay the loan on time. High credit scores enable working capital loan approval and help you to get a lower interest rate.
- Time in running a business
Several lending institutions require a minimum time span of running a business to sanction a business loan. This time may vary with each lender.
- Yearly revenue
You must talk with your lender about the minimum limit of annual business revenue to qualify for availing a business loan.
Selected financial institutions may ask you to mortgage collateral to sanction a business loan. So, make sure you have sufficient tangible assets to use as collateral and avail the required funds.
This list of eligibility criteria is indicative and may have additional requirements depending on different lending institutions.
Step 5: Check your lending option
Do thorough research and create a list of financial institutions that can offer the type of business loan you require. Besides, select a financial institution that provides a business loan with flexible terms and conditions and lower interest rates.
Approaching a lender with whom you have a cordial relationship will further make the process of getting a business loan easier.
Step 6: Keep the correct documents ready
Collect the appropriate documents, such as your business’s balance sheets and income statements, before applying for a business loan. Lenders check these documents carefully to understand whether you have the financial ability to repay the loan on time or not.
So, if you do not maintain such financial records, start doing it so that you can get a business loan in no time; otherwise, your business loan application may get rejected.
Once you follow this step-wise guide, submit your business loan application and wait till the approved funds get disbursed. Before submitting your application, make sure you compare different loan deals on reputed online marketplaces like Bajaj MARKETS.
This step will ensure that you select the best loan deal that is feasible to repay.
To conclude, borrowing and using a business loan is an effective way to scale up your business. Besides, if you want to check business loan eligibility, follow the steps mentioned above and grow your business within the least possible time.