Get the Tata Capital App to apply for Loans & manage your account. Download Now

Blogs SUPPORT
Loans For You
Loans for Business
Investment
Insurance
Apply

Quick Links for loans

Quick Links for Insurance

Investment

Offers Quick Pay
Back

Equipment Finance

Avail Digital Equipment Loans
up to Rs. 1 Crore

  • Attractive ROIs
  • Customizable Loan tenure
Know More
Back

Equipment Leasing

Avail Leasing solutions
for all asset classes

  • Up to 100% financing
  • No additional collateral required
Know More
Back

New Commercial Vehicle Financing

  • First time user
  • Retail and strategic Clients
Know More
Back

Used Commercial Vehicle finance

  • Repurchase
  • Refinance
  • Top up
  • Balance Transfer
Know More
Menu  
 
Apply Now

Tata Capital > Blog > Loan for Business > Some Reasons Why Your MSME Loan Application May Get Rejected

Loan for Business

Some Reasons Why Your MSME Loan Application May Get Rejected

Some Reasons Why Your MSME Loan Application May Get Rejected

Are you planning to, or have you recently started a small or medium-sized enterprise to become financially independent? You may have a brilliant business idea and a strong client base already in place, but generating the money required to establish or expand your business can be tricky. That is where MSME loans come in to help.

Know More

Banks and financial institutions across the country support the growth of small and medium enterprises through attractive credit plans. Regardless of the lender you choose, these loans involve filling out a lengthy application form and compiling extensive documentation. Moreover, even after you have submitted your MSME loan application, the lender analyses numerous details to determine your eligibility for the loan.

Here are some factors that, if ignored, can result in the rejection of your MSME loan application.

1. Low Credit Score

Before approving an MSME loan, every lender looks at the applicant’s previous budget and expense management record. A credit score is a way of grading of your debt management skill, and therefore reflects your budget management efficiency. A good credit score almost always guarantees a positive impact on your application, whereas low credit scores most commonly account for rejection.

2. Negative Cash Flow

Before approving your request for SME working capital, most lenders ask for details regarding your business’ previous profit and recent cash flow. If your expenses exceed your income, negative cash flow is generated. Such companies usually suffer long term losses and are not desirable for MSME loans.

3. Unpaid Debts

If your application for an SME loan indicates that you have accumulated too much debt from various lenders, it can be rejected. No lender would risk giving an SME business loan to a company that is unable to source enough funds to settle previous debts, let alone a new one. If you want to avoid rejection, ensure that most of your past debts are paid or close to settling.

4. Lack of Documentation

Most SME term loan applications require documents related to various aspects of your business. You might also have to furnish personal documents or those of your partners. It can be challenging to keep track of every single document required, but if you fail to provide them, your lender might reject your SME loan application.

5. Incomplete Business Plan

A robust business plan is one of the most critical factors for an SME loan. If your plan does not reflect market projections, profit predictions, and a solid expenditure account, your loan application can be outright rejected.

Small Business Loan Application Form

Before filling out your loan application, resolve all of the mistakes mentioned above. If you are looking for easy and hassle-free MSME loans, approach Tata Capital. Our business loans for small and medium enterprises come with an online application facility, attractive interest rates starting at 19%, a flexible repayment schedule, and responsive customer service. Learn more about the eligibility and documentation details on our website, or use our online resources such as our blogs and EMI calculator.

Apply Now

Give Your Business the Right Boost: Apply for a Business Loan Today

Apply now
Popular Searches
business idea udyogini scheme hsn code full form low investment business ideas top 10 most successful businesses to start transport business import export business in india mineral water plant cost collateral free loans
Disclaimer

Most Viewed Blogs

Trending Blogs

Calculator

Personal Loan EMI Calculator

Personal Loan EMI Calculator
Home Loan EMI Calculator

Home Loan EMI Calculator
Business Loan EMI Calculator

Business Loan EMI Calculator
Used Car Loan EMI Calculator

Used Car Loan EMI Calculator
Two Wheeler Loan EMI Calculator

Two Wheeler Loan EMI Calculator
Loan Against Securities Calculator

Loan Against Securities Calculator
Loan Against Property Calculator

Loan Against Property Calculator
More Tools
Our Subsidiaries
Our Other Websites

Useful Links and Resources

Most Important Terms & Conditions - Home Loans

Download in your preferred language

Download

Policies, Codes & Other Documents

Most Important Terms & Conditions - Home Loans

Download in your preferred language

Download

Tata Capital Solutions & Services

Uh oh, something went wrong

Please try again later.