Convincing a lender and availing a loan for the business is nothing less than an arduous task. But, by following some of the basic guidelines, you can make this process simple enough.
Now that you have finally started up your venture, you would have felt the need to have a substantial funding source. Of course, you cannot operate, thrive, or expand your business without money. Although there are various sources to avail funding, getting a loan from financial institute seems an easy way out. Be it for purchasing machinery or for commercial property; you can avail loan for business based on different purposes.
However, before knocking the doors of a financial institute, it is important to know about some specific guidelines so that you can make this process easier. Therefore, here are some of the tips that will make this procedure simple.
- Know About the Criteria:
Different financial institutes have a different set of criteria when it comes to offering business loans. Thus, your job is to find out the aspects these institutes concentrate on while giving the loan. You can easily gather such information from the official websites of such institutes. So, find out the specifications required to get a loan.
- Documents:
The more you are prepared, the increased chance you have to avail the loan. Even if you forget to attach a single document, your loan application can be denied instantly. Thus, before stepping out in the hope of getting a loan, you must ensure that you have proper documents with you. Again, you can get this information from the site of the financial institute as well.
The important documents include:
- Credit Information Report
- Plan/Estimate/Invoices
- Project Report
- ST Return for 2 years
- IT return for 2 years
- PAN card
- Business Plan:
Having a detailed business plan can elevate the probability of getting a business loan. A lender is more interested in your plan of activities only to find out the ways through which you can generate revenue. Until or unless you don’t have a particular revenue generation technique, you may face hassles while repaying the loan. Thus, just for the lender’s surety, get a proper business plan prepared.
- Explore:
Hopping from one institute to another and collecting the information may seem a tiring job, but in the end, it turns out to be beneficial. The more options you have on your hand, the better decision you will make. In the end, everything comes revolving around the interest rate. Thus, out of all the options that you have zeroed down, choose the one that is offering better interest rate.
- Know Your Limit:
You need to find out the amount of money your company needs. Having a small business, you wouldn’t feel the need to get a large amount. But, asking for a wrong amount can lead to serious problems. While underestimation can cause the dearth of funds, overestimation can compel the lender to doubt your credibility. Thus, have a proper estimate and ask for only what is required.
So, these are some of the steps that you can adopt to make the loan process easier. Do your homework before contacting any lender. Follow these steps and withdraw the loan easily.