As a business owner, you know the importance of working capital better than anyone else. This also means that at some point, you may need to apply for a loan to keep the operations going smoothly.
But what if your business has low revenue? Will the lenders approve your application? Well, since most lenders consider your company’s income before granting funds, the concern isn’t unfounded. Fortunately, there’s no need to worry.
Contrary to popular belief, business loans for low-income earnersaren’t challenging to come by. In fact, today, various NBFCs offer loans to low-revenue businesses at competitive rates. So, if your company is in a similar position, don’t worry! Here’s what you can do to get a loan.
Prepare a compelling business plan
Business plans work wonders when it comes to getting loans for low-income earners. A properly structured plan highlighting your revenue generation strategy, a solid revenue model, and your projected income can convince your lender to approve your application. Show them a clear roadmap of how you will repay the loan timely, and your low revenue won’t be a big hurdle anymore.
Additional Read: Things you should Know for a Great Business Plan
Keep the required paperwork ready
Along with a strong business plan, you must also furnish the required documentation for two main reasons. Firstly, these documents will prove how genuine your plan is. Secondly, they will also show your company’s cash flow and profitability.
Despite your business’ low revenue, if your papers can show consistent profitability and income, along with efficient cash flow management, you can tip the scales in your favour.
So, before you apply for a business loan, enquire about the required documentation from your preferred lender and prepare them in advance.
Maintain a healthy credit score
CIBIL score assessment is a standard business loan eligibility check that most lenders follow. In fact, your business credit score is as important as your company’s annual revenue itself since it indicates your repayment record. If you do have a stellar score but a low revenue, chances are your lender may approve your loan.
A credit score between 750-900 proves your creditworthiness and assures the lender that you’ll repay the loan on time. Thus, if your business has a low income, you must check your CIBIL score before applying and see if it’s up to the mark.
Additional Read: Why Credit Score is Important While Availing a Business Loan
Consider other financing options
Even after having a good business plan, credit score, and all the required paperwork, a lender can still deny you a loan because of low revenue. In that case, you must opt for lenders who do provide loans to low-income businesses. For example, Tata Capital provides loans with structured EMI plans to help you repay comfortably, even with low revenue.
As you can see, your business’ low revenue isn’t a complete deal-breaker. You can use the pointers mentioned above to get the loan. Or, choose lenders like Tata Capital who provide affordable business loan interest rates and relaxed eligibility terms, even if your company has low income. Click here to know more about our loan offerings.