In order to run a business at ease, you require a lot of money. In business terms we call this as working capital. With sufficient capital, a businessman can easily manage his/her business and make plans for the future. But there are many factors like competition, changing market trends and regulations which can affect the way a business runs and makes profits.
In such difficult times, a business loan comes in handy. With the business loan amount you can easily fix the problems which are affecting the way your business runs. You can also plan accordingly on how you can make the best out of the change in market and earn good profits.
How Can I get a business loan?
You can get a business loan for existing and new business. All you need to be is eligible enough as per the requirements set by the Banks and NBFCs. This set of criteria tests your existence of business, the income generation and many more factors. Fulfilling these allows you to apply for Business loans.
What if I’m not eligible as per the Bank/NBFC?
There is a possibility that you might not be able to fulfill all requirements set by the Bank/NBFC. In such times, as a business person who plans the future of his business, you must also check the eligibility criteria and see how you can improve your position.
How can you improve your Business Loan Eligibility?
There are many ways to improve your business loan eligibility. But before that, you must ensure you understand where you are lacking. There are 3 basic things to check before you could apply for a business loan. Improving on these factors can help you get a good deal on business loans from Banks/NBFCs.
Business is not stable: No one will back an unstable business. Because of the uncertainty that lies with the business, Banks and NBFCs will find your business to be volatile and hence not find you credit reliable.
Bounced cheques: This sounds very small but carries a lot of weight. More than 1-2 bounced cheques in a year reduce your chances in getting a business loan. Yes, it is very important to ensure you always make your payments on time and keep sufficient balance for the cheques to be cleared.
Credit score: This goes without saying that a good credit score helps you get good deals. But if you don’t maintain a good score, be ready to get higher interest rate loans. So, before you apply, make your payments on time always and honor your agreements. That will help in improving your score in time.
Having a criminal record and not paying Income tax returns also affects your eligibility in getting a business loan. You need to understand Banks and NBFCs take this very seriously and hence as a customer you must be careful with the way you conduct your business.