It is no secret that business credit was not always easy to obtain. From exhaustive application reviews to deferred disbursals, the process was quite complicated. Even document verification took months to finish and was often accompanied by a strict credit evaluation.
However, over the years, not only has the business loan documentation become minimal, but the verification process has also become more relaxed. Now, loan approval, as well as disbursal, hardly take one to two days, allowing businesses to avail essential funds instantly.
Nonetheless, the required business loan documents and verification process may differ from one lender to another. Given the vitality of the process, make sure you understand the associated terms and conditions well before you apply.
Additional Read: Step by Step Business Loan Application Process Explained
Significant aspects to consider before availing business finance:
- Do not apply with too many lenders at once, in attempts to raise funds quickly. Most lenders today host a free business loan calculator on their website. You can use them to compare prospective lenders and settle for the best deal.
- Prepare the required documents in advance, while ensuring they satisfy the minimum business loan eligibility criteria – papers such as bank statements, tax returns, KYC documents, ownership proof, among others. In this way, when the lenders ask you to furnish the documents for verification, you will be ready.
- Document verification sometimes involves a personal discussion with the lender. To fare well, be prepared to answer questions about your business and financial situation, how you will spend the borrowed amount along with a business plan to back it up.
Furthermore, for a business loan, document verification is a crucial step towards approval. To make sure the process is swift, here are some additional parameters you need to be careful about:
- Credit score – Lenders primarily check the credit score to assess your creditworthiness. Any score above 700 is ideal and may help you secure a loan at a competitive business loan interest rate. If your credit score is lower, try to increase it by paying off existing debts.
- Credit history – A faultless business credit history assures lenders of your credibility to bear the cost of borrowing. Pay off any existing debts to maintain a favourable credit report. Not only will it increase your chances of loan approval, but also allow you to secure better loan terms.
- Income details – To assess the level of risk involved, lenders typically check how steady your income flow is. Where a profitable turnover will impact your loan approval positively, erratic cash flow may prove unfavourable. Best to use a business loan EMI calculator to quote a loan amount you can service within your income capacity for instant approval.
The Bottom Line
Business finance offers excellent leverage to overcome a financial crisis and meet immediate business needs to keep the cash flow steady. Most importantly, timely loan repayment can improve your CIBIL score dramatically, while also enhancing your credit profile in effect. If you want capital to raise capital and avail business credit instantly, turn to Tata Capital. Enjoy a minimal documentation process to obtain quick and easy funds. Get favourable interest rates and repayment terms. For a tailormade, lucrative business loan, apply with us today!