Do you want to get your business loan sanctioned? There are a few things that you need to consider to get your business loan sanctioned. Business loans have become very popular as business owners need enough capital to run their companies smoothly. If you take care of these 10 factors, then you can get your business loan quickly. Here are 10 things to consider to sanction a business loan:
The goal of getting the loan:
You can only get the business loan amount for business purposes. If you are thinking of using the funds for personal use, you might not get the loan approval. So be clear about the goal of the loan and then apply for it.
You need to have a good credit score in order to get a loan. A good credit score is 750 or above, so make sure to maintain a good score before applying for a loan.
There are some eligibility criteria for business loans. So check with your bank if you fulfill the eligibility criteria before submitting your loan application.
Make sure to choose the loan amount that will provide you with a good interest rate, so you do not go through the financial burden of paying the EMIs.
You need to have a positive cash flow to prove to the lender that you can get the loan. So make sure that you have a good debt-to-income ratio to get the loan.
You need to have an operating business for more than six months if you want to get the loan amount. If you have just started a new business, apply for the business loan after six months, or else you might not get the loan approval.
You need to clear all the debts that you have before applying for the loan. Also, ensure you have zero defaults in repaying the loan amount. The lenders consider the repaying capacity of the customer before approving their loan application.
Nature of your business:
If your business is related to NGOs or charitable organizations, then you are not eligible for the loan. You can only apply for a business loan if your work is not related to charity.
You need to have a minimum turnover of Rs. 90,000 for the business loan. Check the last three months and see if your turnover is around this amount. The lenders do not approve the loan application if your business doesn’t have a good turnover.
There are some businesses that are excluded from getting business loans. So make sure that your business has a legit license and registration documents. You will only get the loan if lenders see legit documentation of your business existence.
You must do proper research before applying for a business loan, or your application can be rejected. You can consider all the above factors if you want to get your business loan sanctioned.