Navigating the world of business finance poses different challenges for different types and sizes of businesses. While their functioning may be different, a common component across businesses is the need for cash flow. A business loan thus, is vital for all.
Businesses, be it micro or small, medium or large, will have capital needs from time to time. Though rare, some lucky ones may not require taking a loan, however, when it comes to startups or firms that are expanding, regular or startup business loans can come in very handy. With the availability of so many options, choosing the right business can seem to be a little daunting. Fret not, we’ve got you covered. Here are 7 things that you must consider when you need a business loan.
- Chalk out your needs
Every business has special needs. Loans, especially new business, loans can be a lucrative option. Before you plan on applying for one, chalk out all that you need. Be it buying new machinery or raw materials, analyse how much loan you need. A clear understanding will prevent falling short and going overboard at the same time.
- Choosing the right lender
Rather than looking around for the best lender, look for one that best suits your requirement. Look out for features like reliability, interest rates being offered, fees and charges related to the loan, services offered before you make the choice.
- Check your business loan eligibility
While mkist lenders typically have similar business loan eligibility criteria, it is best suggested that you do the required reaesech. Put an application only with the lenders where you qualify.
- Analyse the cost of the loan
You need to evaluate the loan very carefully. Not just the EMI, but keep an eye on the fees and charges being levied by the lender. You should also check the prepayment charges and the penalty in case of a delayed payment.
- Choose the repayment terms wisely
The repayment is a crucial part of taking the loan. Make sure the EMI you choose fits well in your budget. A longer tenure will decrease the monthly payment but increase the overall payout. At the same time a higher instalment will be heavier on your pocket, but will come with a shorter tenure and lower total payout.
Tip: Download the loan app, and use the business loan calculator to get a clear idea of the EMI that you’ll have to pay.
- Do not lie about your creditworthiness
Your CIBIL score will play an important role when you are looking for a business loan. A credit score, higher than 700, shows your creditworthiness and mauy make it easier to get a loan. In case your credit score s lower, do not hide the information.
Tip: If possible, take a few months and rebuild your credit score. And then apply for a business loan.
- Plan and apply
A business loan is a commitment. Generally, these loans may last upto 3 years. So, it is highly recommended that you carefully plan the repayment, your needs, your upcoming expenses and only then plan taking business loans. Making a well-informed decision will prove to be helpful in the long run.
Over To You
For any business, the right utilisation of a business loan can be a turning point. When you make a well-informed decision, you will be able to push your business to newer heights. Lendingkart business loans can make your loan application and disbursal process simple and secure. Get the easiest financing that too at attractive interest rates, and explore the business opportunities you have been dreaming about!
