The Steps To Ensure Your Business Loan Approval

A businessman always wisely uses the business loan to increase the business and the capital. Pursuing growth is the way to stay ahead of competitors. And to add fuel to development, a loan could help out.

However, when applying for a business loan, the chances of approval depend on several factors. In short, preparing thoroughly is the key to make sure your application does not get rejected. In this short post, we will share some crucial steps you can follow to avoid it.

What Different Type Of Business Loan Lender Offer

Not every lender offers the same type of business loan. Learning about it will give you an edge to choose the optimal one as per the requirement. Government, private lenders have various plans to offer. For example, there are MSME loans that are easy to qualify for. The loan amount is also up to Rs 10 lakh to cover any expenses.

Suppose you are a women entrepreneur, then the norms are easy to qualify. Annapurna Scheme, Bhartiya Mahindra Bank business loan and Mudra Yojana are some schemes, to begin with. Specific lenders such as Ziploan too offer multiple types of loans.

• Business loan

• MSME loan

• Working capital loan

• SME loan

• Instant business loan online

• Business loan for women enterprises

Keep an eye on your Credit score

Since many lenders won't require collateral when offering an unsecured business loan, they will look at your CIBIL score to determine the business loan application's fate. Apart from the personal score, there is a business CIBIL score too. The two metrics are.

• Your personal CIBIL Score

• Your Company CIBIL score

A lender will check both of them to determine the eligibility. If you have a healthy score, it will help to get a big loan amount, low-interest rate, and charges. At least one of them should be in a good position to ensure a business loan approval. Here are some lenders' score requirements.

• ICICI business loans need a minimum 750 score.

• HDFC business loans need a minimum of 700 scores.

• IDBI Business loan requires at least a 700 score.

• PNB needs 750 scores for a business loan.

What are the eligibility criteria?

Here is the thumb rule. First, always check the lender's eligibility criteria for a business loan. By doing this, you will evade wasting time by applying randomly. The eligibility criteria revolve around the annual turnover, business inception timeline, and profit. Some lenders have hard criteria and others do have easy to qualify.

Let's look at Ziploan business loan eligibility criteria to understand it better.

• The business should have a minimum of Rs 10 lac of annual banking credit.

• It should be for the last 2, 3 years.

• The business premise should be in the borrower's name.

• Zipscore (Ziploan own credit ratio) should evaluate you as a solid applicant.

What documents will you need?

To show you are a serious lender, one way is to prepare all the documents beforehand. No matter how extensive the list is, you have each one of the required documents. This is another way to show you are thinking of taking a business loan.

Here are the basic documents you will need. However, it will change depending upon the lender to lender.

• Proof of identity

• Proof of address

• Business ownership proof

• Financial documents

The business plan

You have to convince the lender; the business will boom, eventually making more profit. To show it, a business s plan is a must thing. Created a detailed plan supported with real-time hard facts.

Conclusion

Keep all these points before you apply for a Business loan. Do extensive research before choosing a lender. You should have at least 3 to 5 lenders in mind before taking the final decision. Read More: 1. The best lenders to get instant personal loan for an emergency? 2. A simple guide to Kotak Mahindra Bank personal loan