Small business owners take Business Loans to expand their operations, buy equipment, and stabilize cash flow. Unsecured Business Loans are a perfect funding option, as you are not required to provide any collateral to obtain funds. It is also cheaper than using credit cards.
Before taking a Business Loan, you must determine how much money you require, how you plan to use it, and how long it will take to repay the loan.
To apply for a Business Loan, you can choose either a traditional financial institution or a new-age lending institution. Traditional financial institutions have a more formal and offline way of providing loans, which can be time-consuming. In contrast, online lending institutions like Clix Capital enable you to apply for business loans with minimal documentation, faster processing, and quicker disbursals.
So, it makes sense to read and research the most suitable lending option based on your eligibility and requirement before applying for the Business Loan.
Steps to follow before applying for a Business Loan:
- Decide the loan amount: A business could need a loan for several reasons, such as buying equipment, fostering future growth, investing in real estate, expanding through acquisitions, and more. Other reasons include acquiring unrelated business assets, keeping extra money in the reserve to make up for monthly losses, and building working capital while business is slow. So, have the motive of the loan clear in your mind and decide the loan amount, so you only borrow the required amount.
- Good credit score: The company’s credit score is one of the most important things lending institutions look at before approving a loan. A company’s reliability and capacity to make payments are reflected in its credit score. A CIBIL credit score of 700 and above can increase the lending institution’s confidence in the company’s ability to repay loans.
- Fulfill eligibility criteria: You should thoroughly research every aspect of the Business Loan you are willing to take. It’s important to look at the lending institution’s eligibility criteria, benefits, and terms and conditions. You can also use the Business Loan Calculator to calculate your EMIs based on your loan amount, interest rate, and repayment tenure. The calculator is available for free on the Clix Capital website.
- Processing time: Business Loan applications’ processing time is much quicker than conventional financial institutions. Once your loan is approved, the money gets instantly disbursed to your account. For faster processing, you can apply with Clix Capital, which accepts applications for Business Loans online and offers quick approval and instant disbursal after a brief in-person verification.
For the lending institution to approve the Business Loan quickly, an entrepreneur should always be prepared with the required documentation. You can use the business loan EMI calculator available on the Clix Capital website to understand the structure of the EMI you will make to repay your loan. Once you get clarity about the eligibility criteria and the loan process, applying for a Business Loan will be much easier.
Amaira Sharma is a finance expert and former business growth strategist who has more than 8+ years of experience in the industry, now she helps others to get better financial stability and standards. She loves to write useful tips on personal finance and businesses.