Every Business aspires to deliver a quality product and earn revenue. Their primary goal is also to make profits. All this cannot be done just with an idea. You need to arrange for a location, labour and a lot of capital.
For any business to survive, it needs a lot of capital to run the daily business, manage the extra costs and also the opportunity to make more money through the venture. But sometimes, arranging funds is ain’t that easy.
You can’t always increase your capital with the reserves. It’s also not possible to ask for money from relatives and friends always. Hence business persons opt for arranging funds from a bank or NBFC. Keeping this in mind, we have created a list of 10 quick tips which you can utilize before choosing a business loan.
These tips can help you understand business loans in detail.
- ALWAYS have a business plan
No business plan means no business loan. Banks and NBFCs usually require such plans with detailed explanations so they can analyze if you will be able to repay the loan without any default.
- Avail just the required amount
You need to apply for the loan amount that you need and not the loan amount you want. For eg: If you require a business loan for 50 lakhs, then you must apply only for 50 lakhs. Please don’t apply for anything more than that just because you are eligible for it.
- Look for NBFCs along with Banks
There are NBFCs, other small banks and financial institutions that provide business loans. So keep your options open.
- No bounced cheques or delayed payments
If you want the best business loan, please ensure that you don’t have any bounced cheques or delayed payments within 12 months minimum. Having any of these errors will have a drastic effect on your future loan possibilities.
- Try understanding what Banks and NBFCs want from you
One of the best ways to get an amazing deal on business loans is when you know what the bank requires from you. If you have everything that it takes to get a good deal, you surely can get it.
- Maintain positive bank account balance and clean tax records
It’s always a plus point if you can maintain a good balance in your account. It is also better if your tax record is clean and paid. If not, then mention it in the business plan on how you plan to clear it.
- Get all your finances audited
Like taxes, you must get your financials audited. This is because a clean record will always help the bank in understanding how genuine you are.
- Always do EMI payments on time for your existing loans
Since you are trying to get a business loan, it is wise to always pay your current obligations on time. This is because it creates a good image in front of the lender.
- Understand the prepayment clause clearly
When you want to pre-pay your remaining loan amount, the banks will charge you a small penalty. Hence in case you have prepayment plans, please understand the charges associated with it.
- Understand about late payment charges too
There might be an event where your business might not be able to make enough money to repay loan EMI. In such a situation, Banks will charge you a late payment fee which will affect your credit profile for the future.
Overall these tips will help you get the best business loans. If you need to compare and choose the best offers you can always visit Ruloans web portal.