The world of commerce and economics is constantly changing, and with competition becoming more intense, unique growth opportunities continue to crop up as well. For established and new businesses, innovative thinking and new ideas carry immense potential, if acted upon and realised at the right time. However, only a few end up capitalising on such ideas, while the rest get caught up in managing their finances.
A timely capital infusion into your company allows you to open the doors of possibility and enable you to deal with any hurdles on the way to success. Today, the ease with which business funding is available with NBFCs like Poonawalla Fincorp can assist companies in real time and help them overcome both minor and major obstacles.
Small Business Loans can help expand business operations and meet specific objectives. You can get loans and plan your investment, returns, and repayments systematically. The rate of interest will guide you in managing the loan. Assess your Business Loan eligibility and select a financial institution that matches your needs. Understand how Small Business Loans work and how to leverage them for your business.
What are Small Business Loans?
A Small Business Loan is a financial instrument that plugs cash flow gaps, such as investment in equipment, marketing expenses, day-to-day operations, etc. In the case of a relatively new business, Working Capital Loans are available without collateral, provided by new-age fintech companies like Poonawalla Fincorp. Factors like loan amount, term duration, eligibility criteria, repayment terms, and rate of interest can vary based on your loan provider. You can opt for a Small Business Loan by evaluating your available options and selecting the best based on your requirements.
How to Secure Loans for Your Business?
If you have a profitable idea and want to finance it but are feeling short of capital, secure a loan by following these steps.
- How much loan is needed – Ascertain the amount of loan that your business needs for ongoing or new expenditures. Estimate at least a 6-month spending window to get a better idea.
- Credit Report – A credit score is a three-figure number that is used to determine the creditworthiness of an individual. A credit report helps individuals and business owners calculate their chances of loan approval. Since a new business will require a few years of operation to establish a credit history, the personal credit records of the business owner are critical and should be improved, if needed. Remember to review them, consolidate collections, and ensure payments are done promptly.
- Business Plan Review – A loan application will require a viable business plan. Financial institutions like Poonawalla Fincorp can help assess your business plan to ensure it is sustainable. This is to ensure that you will be able to pay back the loan in time. The business plan will also serve as a roadmap for you. While drafting the proposal, you must include the reason for which you need financing. A detailed request should specify the amount required, itemised spending, and how the funds will be deployed.
Applying for a Small Business Loan
Once you have finalised the right approach for a Small Business Loan, you can go through the following steps:
- Complete the application and provide all the necessary details. If applying online, visit the website and complete the formalities.
- You can also submit a physical copy of your loan application at the branch or office of the lending institution.
- Submit personal credit scores or reports.
- Share your business plan.
- Supplement your application with KYC documents, account statements, etc.
- Certain expenditures might require the submission of respective documents.
- Collateral documents, if specified by the lender.
The Right Approach to a Business Loan
Small Business Loans have several advantages, such as easy access, multiple repayment options, and a simple application process. As a small business, you can benefit from quick fund disbursement, customise the solutions, and secure the loan at an affordable interest rate. Most Small Business Loans are available collateral-free. You can obtain these loans by meeting the basic Business Loan eligibility criteria and following the process properly.
Do your research and explore different options to find the right loan for your business and determine the eligible amount. Also, remember to keep your documents, reports, and plans organised. Make sure to calculate EMI and finalise the repayment schedule.
Follow the aforementioned steps to fund your business idea and see its success skyrocket with the help of Small Business Loans.