Every entrepreneur who wants to start a new business or every businessman who wants to expand the business by various means have one thing in common: they need a strong financial backing. Government of India is supporting businessmen and entrepreneurs with tax benefits, latest schemes and various start-up initiatives. But to make the business dreams come true, everyone needs money. Here business loans can become a boon. Businessmen are born with an instinct to take risks but when it comes to taking a loan; their judgment gets clouded by various business loan myths. Here we have tried to shatter those myths and help you to embark on the ladder of success.
MYTH 1: You won’t get loan for small requirement
A business can be small or bigger depending upon the business plan, locality and the idea itself. Thus the funds required for business loan can vary from mere lakhs to crores. Many think that banks and NBFCs give away business loan if your requirement is in crores, which is NOT TRUE! Micro, small, medium and large; all types of businesses can avail loans. According to the government rules and regulations, small amount loans are granted by financial institutions.
MYTH 2: Loan approval is done at snail’s pace
Loan procedures are lengthy. You need proper documentation and eligibility to get quick approval on your loan proposal. Many think that business loan approval is like preparing and going for an Everest trek, which is NOT TRUE. If you have clean documents, right eligibility and a considerable business plan, you can easily avail a loan within 7 working days.
MYTH 3: You need a perfect credit score or else you won’t get a business loan
Having a strong credit score is a witness to your financial stability. It is considered in the beginning of the loan approval process. Having a perfect credit score surely helps you get the required loan amount but is it NOT TRUE that it’s the only factor or it needs to be strong. Those who are starting a new business may not have a perfect credit score or even a credit score sometimes doesn’t define your worth and eligibility to pay off the loan amount in future. So yes, it is an important factor to get a business loan, but not the only one. Even if you have a normal strong credit score, a worthy business plan and a set of clean required documents, any financial institute can grant you the loan.
MYTH 4: If one bank rejects my proposal, all banks close their doors automatically
Sometimes things may go in wrong direction and you business loan application may get rejected for any apparent reason. But that doesn’t mean that you should give up your desire to take a loan or lose hope of ever getting a loan. If a bank rejects your loan, it does reflect on your CIBIL score after a minor time gap but it is NOT TRUE that it affects your next application/s. The eligibility criteria changes from bank to bank. So even if one bank rejects your proposals doesn’t necessarily mean that other bank will do the same. Banks will give you loan up to 80% of your project amount. What varies is, it will take a little bit of extra time to get the funds as you have to repeat the whole application process.
MYTH 5: New businesses do not get loans
With new government rules and tax exemptions, more and more people are starting their new business. A well built business can get a business loan easily as it has built s fairly strong CIBIL score over the years. But when you are getting a business loan, the person/s score is taken into consideration. Also the documents, eligibility and a good business plan are matter a lot. If you fulfill the basic criteria to get a business loan, you can prove this myth NOT TRUE.
So now that all the business loan myths are burst, choose a loan plan according to your needs by clicking here.