Have you been holding on to a business idea for years but have never acted on it? Well, then now is your time.
Taking a business loan in 2021 is easier than ever. All you need is a trusted lender to help you bring your ideas to life. Be it buying new machinery, recruiting staff, or marketing, opting for business finance can help you sustain the operations, no matter how big or small.
However, you must follow a few business loan rulesto ensure a smooth borrowing process in 2021.
#1 Check your eligibility and keep documents ready
Your first step should be to confirm whether you’re eligible for the loan or not. You can find the business loan eligibility conditions online, and they are usually similar across different lenders.
We use the following eligibility criteria at Tata Capital:
- You must be between 25-65 old years
- Your business must be profitable for at least 3 financial years
- Your business turnover must show a positive trend
- Your balance sheet must be audited by a registered Chartered Accountant
Moreover, to obtain business loan without any hassle, it is also crucial to stay prepared and have all the required documents ready. At Tata Capital, we’ll ask you to submit the following documents:
- Photo Identity Proof
- Business Proof
- Income Proof
- Bank Statements
- KYC Documents
#2 Maintain a healthy CIBIL score
Your credit score or CIBIL rating is a measure of your creditworthiness and helps the lender assess your repayment capacity.
If you have any existing loans or credit card bills, it would be best to pay them timely as it’ll help you improve your credit history favourably. Try to get your CIBIL rating up to 700 or more to get swift loan approval.
#3 Have a sound business plan
Having faith in your business idea is important, but having a sound business plan is essential! After all, the lender needs to know how you into to use the borrowed funds. Hence, you must be clear about your business goals and revenue projection before applying for a loan.
Additional Read: Things you should know for a Great Business Plan
#4 Enquire about any hidden charges
Lastly, it is crucial to enquire about any additional charges like the loan processing fee. Enquiring about the hidden costs beforehand can save you from being in a tough spot later.
After the estimations, if you think you cannot afford the loan with the extra charges, you may have to look for a different lender. Hence, you should ask about miscellaneous costs and penalties beforehand.
Ready to start your own business? Let us help!
At Tata Capital, we offer flexible loans with attractive business loan interest rates to help kick off your dream venture. We can equip you with the necessary funds to help you take care of your urgent financial requirements and business expenditure.
You can also use our business loan EMI calculator to get a precise estimate of the EMIs you’ll have to pay later and plan a budget accordingly.
Visit our Tata Capital’s website to apply for a loan and bring your vision to life!