How to get a loan for Business start-up at minimum Rates and Affordable EMIs? Here It

Author: Harish Suyal

Summary: The Business Loans is the best option, if you are looking for business funding, no matter you are a start-up or an existing business looking for ways to expand your business.

Descriptions: For a small business to get off the ground, it must have financing. Are you searching for business advance for your start-up? Are you interested in knowing the process of business loan application? If that’s true, then you are at right place.In this article you will come to know about the best way to secure Loan for Business if you are a start-up:

Purpose of Your Business Loan and Amount

As a small business owner, you need to clearly articulate your loan request with a clear purpose and funding amount you need. Your loan application form should distinctly mention your industry role and how much capital you need. Here are some of the advantages that a business loan brings in:
  1. You can build new business branches.
  2. You can flexibly remodel the existing office, shop or manufacturing unit.
  3. With a business loan, you can easily purchase new hardware and machinery for business growth
  4. You can invest funds in business marketing and promotions
  5. You can upgrade the safety such as CCTV installation, software security efforts keeping in mind the end goal to anticipate dangers or vulnerabilities

Healthy Credit Report and Credit Score

For start-ups less than 3 years old the credit history of the business owner and business, in general, is evaluated. Before you apply, spend time on improvement of your credit health in order to avoid the application rejection. To know your credit score you can request the free credit report from any major credit reporting agencies such as CIBIL, Experian or Equifax. If you see any faults on your credit report, then contact the agency to fix the issues.

Also, check on your credit score. A credit score above 750 is considered good and will allow your application to get instant approval.

Compare all Your Credit Option

You must look at all the Instant Loan options such as government schemes, commercial banks and digital lending platforms available in your city or state. Don't just opt for the first option in your hand, you may avail a better deal with lower interest rates.

There are several P2P lending platforms that allow you to crowdsource the business working capital. Anyone with good credit score can apply for a Loan for Business Start up with Peer to Peer (P2P) lending platforms. Start-ups can easily raise business working capital of up to INR 10 lacs with these digital lending platforms. Also, P2P lending platforms do not require any collateral. Thus, making them a lucrative option for SMEs to avail financing without any asset as security.

In case one financial institution turns you down, another may approve the same credit request, so keep trying!

Lastly, can you repay the loan amount?

The EMIs is the most crucial part of a loan. You need to carefully look into your business financials – especially the cash inflow. To securely repay your Loan for Business Startup, your total revenue should be at least 1.25 times your total business expenses. This will help you evaluate what amount of credit you can reasonably afford to apply, towards making consistent EMI payments each month. You can use EMI calculator to determine your loan’s affordability.