A Business Loan is a financial solution to fulfill the business requirements. The requirements can include buying machinery or raw materials, upgrading the infrastructure, repairing the older machines, hiring new staff and expanding the operations of the business in general. Depending on the type of business, various kinds of business loans are offered by financial institutions today. The loan can be for start-ups, MSMEs, it can be for working capital requirements. Some business loans are specifically designed for women as well. Business Loans provide great relief from the financial burdens that the businesses might be facing. And today, banks/NBFCs provide Business Loans of high amounts at very attractive interest rates along with special deals and offers. You need to assess the financial situation and avail the loan accordingly. There are certain things that you might need to provide to the bank while applying for a Business Loan. Let us know what are these:
- Collateral as Security
This basically depends on the loan amount. Although most of the financial institutions in India provide loans without security i.e. an unsecured loan which can be pledged without a collateral, if the loan amount is very high, then you may have to provide a collateral. This is usually in case of start-ups where higher risk is involved on the repayment grounds. The kind of collateral that you will have to provide depends from lender to lender.
- Business plan
This document is required by the bank to check the financial position of your business. The Business plan must include financial details pertaining to cash-flow, annual sales, turnover, income, profit and loss etc. Depending on the plan, your loan amount will be decided.
- Aim of borrowing the Loan
As mentioned earlier, depending on the type of business, various kinds of Business Loans are available today. You must be confident enough of what kind of loan you wish to avail. This also gives the lender the clarity and the process further can be smooth.
- Audited copies of your financials details
Along with the business plan, you must submit the audited version of all your financials. The balance sheet must contain all details with respect to your business assets, liabilities. It should give a clear view of the profit and loss statements. It should be audited by a Chartered Accountant for authenticity.
- Insurance details
Banks always prefer the businesses and enterprises that are insured, as insurance indicates that the businesses are ready to handle financial emergencies in the difficult times and repayment can be done through the insurance plans.
You must submit the financial details regarding the profits that your company has made as it gives lender an idea about the financial positon of the company. A good record of profit can significantly increase the chance of loan getting approved.
- Repayment history
This is a very important factor. Lender always consider your repayment history. This gives them a fair idea if you have defaulted on your repayments in the past, basis which your application will be processed. CIBIL Score also helps the lender determine your creditworthiness.
- Permit and License
License is required for the business to operate legally, according to the rules and regulations. You must submit the proof of permission provided by the government. Along with this, necessary permits associated with environment, health and disaster management must be submitted.
- Personal Details
As a part of the application process, you must provide personal details like name, location, date of birth, mobile number etc.
Along with the personal details, you must submit necessary documents like identity proof, address proof, income proof for application processing.
Now that you are aware of the things required for the business loan, apply for the same today. You can apply for a Business Loan of up to Rs. 30 Lakhs at Finserv MARKETS or by using their loan app. You do not need to pledge any collateral. The application process is very smooth and a very few documents are to be submitted. You can get your loan in just 24 hours. So, what are you waiting for. Choose Finserv MARKETS today for business loan.