If you own a company or business, and need to increase its liquidity, you can consider applying for a Business Loan online. Today, applying for a Business Loan has become easier as compared to the old days of endless back-and-forth with loan agents and lenders for getting any kind of loan. With the ease of digitization, loan applications have become a much faster and seemingly seamless process. However, before understanding how to apply for a Business Loan online or offline, it might help you to get accustomed to its benefits and related considerations.
Advantages of Applying for a Business Loan
- In case there is an urgent need for extra funds to upgrade or stay afloat, a Business Loan acts as a saviour.
- Even when there is some liquidity in the business, you can apply for a Business Loan and use the funds to maintain liquidity.
- EMIs for Business Loans can be cited as expenditure during income tax audits; therefore, you might benefit from tax deductions.
- You can use a Business Loan for upgrading equipment, hiring staff, or expanding infrastructure, instead of using liquid funds.
Business Loan Application
Now that you know how a Business Loan may be of benefit to you and your company, you should get familiar with the procedure you’ll need to follow to avail of it. Follow these below-mentioned steps to apply for a Business Loan:
Find a Loan Scheme
The first and foremost thing you need to figure out is the kind of loan you need. Based on that, you can apply for any of these loans below:
- Loans for MSMEs – Based on the scale of your business, it can be categorized as a Micro, Small and Medium Enterprise. If your company falls under this category, you are eligible to apply for an MSME Loan.
- Loans for Medical Equipment- If your hospital, clinic, or even personal practice requires new medical equipment or upgrading what you have already: you can certainly apply for a Medical Equipment Loan.
- Loans for Working Capital – You can apply for a Working Capital Loan if your current liquid funds are not enough to run daily business operations.
The most crucial aspect of approving a Business Loan is the verification of required Business Loan documents by any lender. Document verification becomes even more imperative when companies apply for a Business Loan online. Often the disbursal of funds gets delayed due to incomplete, illegible, and even illegal documents being submitted. Hence, it is imperative to gather all the required documents in handy before you apply for Business Loan. Also, choose a lender like Poonawalla Fincorp that offer Business Loan with minimal documentation.
You will need to submit the following Business Loan documents:
- Application Form – You must fill out this form correctly as it will fast-track and smoothen your application process. Be transparent while declaring both business and personal details.
- Business Plan – Curate a thorough and clear business plan with realistic expectations and possible projections.
- Bank Statements – Provide your company’s bank statements for the last six months.
- KYC Documents – You will have to provide KYC documents for both the company and self.
- Tax Documents – Provide income tax returns for the last two years.
- Balance Sheet – An audited balance sheet for the last two years.
Figure Out The EMI
Before applying for a Business Loan, you must be very clear about the amount you can pay every month in the form of EMIs. To get a clearer picture of the same, you can use the Business Loan EMI Calculator that almost all lenders offer online. They are free of cost and will help you come up with the exact amount of funds for which you can apply. Make sure you do not exceed the limit and mess up your monthly budget.
Along with all the requirements mentioned above, a good credit score or CIBIL score is a must when you apply for a loan. The minimum score required to get approval on your Business Loan application is 700. If you don’t have a good score, make sure you improve it before applying for a loan. Because if you do not have a good CIBIL score to show prospective lenders, your loan application might get rejected.
While it was truly complicated and tedious to apply for a Business Loan in the past, it has become seamless and accessible today. For online loan applications, the verification and disbursal of funds doesn’t take more than 3-4 days. So, if your business requires extra funds to stay afloat, maintain trajectory, grow, or upgrade its technology, you should consider applying for a Business Loan online.