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Does Company Type Affect Your SME Business Loan Eligibility?
Over the last few years, we have seen an increase in the number of entrepreneurs and innovative business ideas. These businesses have also provided a huge boost to the economy and increased employment opportunities in India. Most of these businesses include MSMEs (Micro, Small and Medium Enterprises). As these MSME businesses operate on a low scale, there is a constant requirement for funds.
According to the type and nature of the business, owners must follow various company registration regulations which help them to incorporate their companies. The company registration process helps the incorporation of the company, allowing it to run smoothly. During the company registration process, the business owner must follow the required compliance set under the specific act. Similarly, to form an MSME company, the business owner must register the company under MSME Act.
Generally, two factors of annual turnover and investment in plant, machinery, and equipment define the category of the business.
Also Read: Small Business Money Management Tips: 5 Tips for Success
The businesses that fall in the above-mentioned factors are termed MSMEs.
Like other Business Loans, an MSME loan is used for business purposes. Business owners utilize the loan amount for numerous purposes such as upgrading services, buying new machinery or new equipment, setting up a new office, and hiring new employees.
With Poonawalla Fincorp, borrowers can easily apply for Business Loan with an effortless simple loan process. Business Loans are designed to fulfil the requirements of the borrowers. Business owners are always looking for quick funds to tackle the financial crunch in their businesses. Poonawalla Fincorp aims to assist business owners to expand their businesses and help them solve any short term financial crunch issues.
Generally, MSMEs operate on low capital as compared to bigger businesses. There is a high probability that MSMEs might constantly require capital to ensure there are enough funds to deal with any financial challenges.
To apply for Business Loan for SME, you need to meet the below-mentioned eligibility criteria:
Also Read: Get a Hassle-Free Business Loan for Self-Employed Individuals
While applying for a Business Loan, the lender verifies and examines all the necessary information required to determine your creditworthiness. In case there are any previously unpaid debts or additional debts which are on the heavier side, there are chances that your Business Loan application might get rejected. It is important that you manage your existing debts first and then apply for a new Business Loan.
A credit score is one of the major factors that determine your approval of a Business Loan application. A credit score reflects your creditworthiness – in case of a poor credit score, there are high chances of rejection of the loan application. Also, with a poor credit score, there is a probability of getting a loan at a high-interest rate.
Your cash flow indicates the ability to pay off your financial obligations after paying for your operating expenses. Insufficient cash flow means the business will be unable to pay back the interest on time. Also, it impacts the confidence of the lenders.
You can apply for a MSME Business Loan with Poonawalla Fincorp by following these steps:
Step 1: Visit the official website of Poonawalla Fincorp
Step 2: Click on the Business Loan, go to Business Loan for MSME section
Step 3: Check the eligibility criteria for Business Loan for the MSME section
Step 4: Click on ‘Apply Now’ under the Business Loan for MSME section
In conclusion, Business Loans provide leverage to the business to deal with any kind of financial challenges. Benefits such as minimal documentation, flexible loan tenure, no collateral, higher loan amount, quick disbursal, and many more assist businesses and ensure that all the requirements are fulfilled on time.
We take utmost care to provide information based on internal data and reliable sources. However, this article and associated web pages provide generic information for reference purposes only. Readers must make an informed decision by reviewing the products offered and the terms and conditions. Business Loan disbursal is at the sole discretion of Poonawalla Fincorp.
*Terms and Conditions apply
Our team of expert writers and editors are passionate about providing authentic and valuable information on finance. Our aim is to simplify financial and finance-related concepts. We strive to help our readers become more aware and empowered to make informed financial decisions.
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