5 Healthy Financial Habits for Instant Business Loan Approval

The Business Loan is a good choice to start a new business or to expand the existing business. There are 5 basic business loan types – Business working capital loan, equipment financing, merchant cash advance, a line of credit, and franchise loans for start-ups.

The lack of funding is one of the topmost reasons for the failure of start-ups in India. Although, numerous financial institutions are standing to offer financial support to the businesses even, so the bitter truth is that 95% of business loan applications get rejected or receive a negative response. Most of the loan rejections happen due to ineligibility of the small businesses to avail a business loan. This is because the stringent eligibility criteria which traditional financial institutions follow. To qualify for business financing a business owner, as well as the business both, are evaluated based on several factors.

To qualify for business funding, you need to build up some financial habits which can enhance the business creditworthiness. Let’s learn some imperative financial behaviors to stand in the group of that 5% of people can be successful in availing a business loan.

Efficient Payment History

For business owners, it is important to be disciplined regarding all the business payments made. Every lending platform evaluates your credit rating before sanctioning your loan. Your credit report reflects the payments made by you towards any of your loans or clients. With a good payment track record, you will eventually have a good CIBIL score. This ultimately reflects your business stability and growth. The timely payments of your debt, you help you will maintain a good credit score.

Well-organized Cash Flow

Cash flow is like the bloodline of a business. For the smooth functioning of your business your expenditures and payments both should be on time. You must guarantee that you are receiving your payments on time. Maintaining your balance sheets between the incoming and outgoing fund will help you to pay off the payables on time which is another imperative characteristic of a healthier cash flow.

Right Documents

Every lending platform asks for personal and financial identity documents when it comes to lending a business loan. Primarily asked documents include your business license, ITRs, revenue statements etc. Before applying for a loan, you can ask the lending platform what the documentation are they need to Check Loan Eligibility..

Check out all options for your Business

Most of the people are only aware of traditional business loans. However, there are several other forms of business funding options are also available. Angel investors, crowdfunding, Peer to Peer (P2P) lending are some of them. These options nowadays are more helpful than another customary form of business loans.

Putting it all together!

In the current market scenario, Small to Midsized Enterprises is in constant need of funding. You can apply for a Business Loan for New Business either from traditional sources such as banks or from NBFC-P2P companies such as Faircent. They will provide an ideal solution to meet your business capital requirements. These will partner with you to help you get started with your new business.

Faircent is India’s leading Peer to peer (P2P) lending platform in India. We facilitate P2P loans and investment services in debt products for you to borrow and lend money by means of our online credit marketplace.