Money is the lifeblood of any business. Money plays a crucial role in every aspect of a business, whether it is starting a new business or expanding an existing one. Capital for the business can be raised from personal funds, such as savings and investments, or by taking out a new Business Loan.
What is a Business Loan?
A Business Loan is an amount of cash lent by a financial institution to a business for economic goals such as extra investment, expansion, and so on. This sort of financing helps businesses meet their immediate expansion and growth necessities.
Why do you need a Business Loan?
A Business Loan from Poonawalla Fincorp can help your business expand. You can use the money toward business equipment, developing your infrastructure or operations, hiring additional people, or managing day-to-day cash flow. Business loans can help you keep your company running smoothly while also taking advantage of market opportunities. India's small and medium businesses continue to rely on the banking sector.
The ongoing search for sources of working capital is one of the most worrying areas for an entrepreneur's growth. Finding means to raise finance for a small or medium-sized business (MSMEs) with few assets or collateral can be challenging.
MSME Loans, also known as Micro, Small, and Medium Enterprise Loans, are loans you can get if you run a company or are an entrepreneur. This form of loan gives you working capital that you can use to buy new goods, acquire new equipment, pay your employees' salaries, or expand your business. MSME loans are available from a variety of lenders in India. Interest rates vary from lender to lender.
MSME classification is best defined here.
Investment is limited to ?1crore, while revenue is limited to ?5crores.
Investment is limited to ?10crores, while revenue is limited to ?50crores.
Investment is limited to ?20 crores, while revenue is limited to ?100 crores.
Interest rates on MSME loans begin at 7.65% per annum. Depending on the lender, the loan amount might range from ?50,000 to several crores, and the loan repayment period can be as long as 15 years.
Here are some things you should know before asking for a Business Loan from a bank or a non-banking financial institution.
How to get a loan under MSME?
To answer the basic question, ‘How can I get a Business Loan?’ begin with assessing your eligibility for a loan.
You can apply for a loan if you are one of the following individuals:
To make the procedure go smoothly, keep the following general loan eligibility conditions in mind:
Steps to Apply for a Business Loan:
Step 1: Log on to Poonawalla Fincorp’s website
Step 2: Navigate to the Business Loans Page
Step 3: Click on the Apply Now button
Step 4: Register for an account with your basic details
Step 5: Fill in the application form with your financial information and requirements.
Step 6: Upload the required documents
Step 7: Click on Submit
Our representatives will get in touch with you to take the process forward.
How Can You Ensure That Your Loan Is Approved?
To be eligible for a Business Loan, you must be able to demonstrate your ability to repay the loan. Here are a few suggestions for how to get it right.
#1 Maintain a good credit rating.
A credit score is an indicator of creditworthiness. A high credit score indicates that you are financially responsible and unlikely to default on your payments. It also demonstrates your ability to make wise financial decisions.
The company's loan eligibility is influenced by your or the founders' credit score, as well as the company's payment history compiled from numerous institutions. A credit score of 700 or more will boost your creditworthiness and, as a result, your loan worthiness.
#2 Show a healthy cash flow in the company.
The lender will assess your company's cash flow projections to check if it is sufficient for the loan size you are looking for. Previous tax returns and other financial documents will also be analyzed. So, ensure there is sufficient cash flow within the company.
#3 Keep your loan application documents ready
Ensure that you compile all required paperwork to simplify the loan application process and make things easier for you and the lender.
The following are some requisite verification documents:
Do’s and Don’ts when applying for an MSME loan online
Here are some things to take care of when applying for an MSME loan. Continue reading to increase your chances of securing a loan for your business while lowering your risk of rejection.
Getting the proper type of Business Loan from the appropriate institution at the right time can save you time and money while also allowing you to expand your company significantly in the future. Apply for an unsecured Business Loan online after analyzing all the necessary benefits and drawbacks.
A personal loan comes in handy in times of requirement and fund crunch. The quick approval process, higher loan amount, and varied end-use makes it an ideal choice for many customers.
Running a small business in India is very tough. The increasing competition, low-profit margins, and innovative business models are making it tough for small businesses to stay afloat.
Getting a business loan is easy in most cases. The business owner just needs to fill out an application form with a particular lender to get a business loan. Along with filling out the application form applicants must fulfill the eligibility criteria of that lender.
There has been a massive improvement in the financial literacy of the modern Indian, thanks to the rise of the internet and the increasing interest of the users.