The National Manufacturing Competitiveness Programme, Credit Linked Capital Subsidy Scheme (CLCSS), Export Promotion of Capital Goods (EPCG), and Credit Guarantee Fund Trust for Micro & Small Enterprises (CGTMSE) are some of the programs by the Government to push the development and promotion of SMEs and MSMEs in India.
More than 42 million such businesses dominate the country, contributing 24.63% to the services GDP and 6.11% to the manufacturing GDP.
Other than the programs mentioned above, financing has also become easier to avail for these businesses and account for 16% of total lending. NBFCs have played a critical role in recent years to make the availability of business loans less complicated. Some also have business loan app which reduce the hassle to apply and avail for financing.
However, you have to consider some aspects before applying to ensure that your application is approved.
Some of these include:
- Prepare A Robust Business Plan
Having your loan application backed by a sound business plan is one of the ideal ways to ensure the former has credibility. Lenders will want to see the projected financials of your company; they also want to ensure whether it has the potential to generate income to repay the loan without defaulting.
A robust business plan must also include details encompassing your firm; for example –
- Services or products provided by it
- Previous performance or financial history
- The management team
- Marketing strategies
Additionally, your business plan must also say the loan amount you are looking for. Mentioning the purpose of the loan and the investment areas is also a plus; however, lenders don’t usually ask for the same as these easy loans don’t have any end-usage restriction.
- Improve Your Credit Score
A minimum credit score of 750 is mandatory to apply for business loans since these are unsecured or collateral-free. Lenders judge your repayment capability by checking your CIBIL score. A high credit score ensures that you are creditworthy for the loan.
There is a high chance that your CIBIL score is already high is you have availed credit in the past and handled it responsibly. In other cases, you can opt for a credit card to improve your score. A good CIBIL score increases your chances of loan approval when applying through business loan apps.
- Make Sure To Have All The Necessary Documents
You may include all the documents needed to apply for a business loan in your application. These documents include –
- Balance Sheet, Profit & Loss Account Statement, and other relevant statements of the last year audited by a CA.
- Bank account statement for the previous year.
- Income tax returns for the last year.
- KYC documents – Driving License, PAN, Voter ID, Aadhaar, Passport, etc.
- Business proof documents – RoC registration, GST registration certificate, Articles of Association, Memorandum of Association, partnership deed, etc.
NBFCs usually send their representative to collect these documents from your doorstep when you apply via business loan apps.
- Fulfil The Age And Business Vintage Requirement
You must be within the ages of 23 and 57 years to qualify for a business loan. Additionally, your business must also be at least 3 years old.
Baja Finserv is an NBFC that
provides business loans against these simple eligibility criteria. You can
avail loans up to Rs.30 lakh with tenor up to 60 months when applying from
their instant loans app
Experia. They also bring you pre-approved offer to help you save time when
availing loans by simplifying the entire process. Pre-approved offers are
available on a range of financial products like business loans, home loans,
personal loans, etc.
Keeping these aspects in mind improves your chances of getting a business loan
approved within one working day. Apply through business loan apps to minimise
the hassle and save time.
