It’s the era of young professional having new fresh and radical ideas are working with passion and dedication to start something their own. With a campaign like make in India and digital India, the country is on the path of economic development where various horizons are being explored. Majority of the young entrepreneur are from technical or commerce background, no doubt they have the skills but managing business finances become a task for them. The biggest struggle in a startup is to manage the expenses which come on the way in day to day basis as well as large expenses like infrastructure and salaries.
Arranging Business Finance is the crucial part of any business no matter how big or small it is, even for an MNC. Only a few sets up manage to have enough of funding and rest remains unaided. In such a scenario, a Business Loan can be used to keep the momentum of flow. In current time various banks and NBFC itself has come up with business loans for new and existing businesses. Let see some of the details of these loans:
Who are eligible for a business loan?
Age: In order to get these business loans, the applicant should be at least 21 years of age and maximum at 65 years.
Security: Most of the banks ask for collateral deposits in order to get your loan approved, this could be anything an asset like property, house, land, etc.
Plan of business: Most of the banks will ask for your business plan to approve your loan. This may include the company, your team, market study, ROI and product.
Detail related to Business Finances: Whole details of your previous loans, credit card accounts, investment accounts, any debt and supporting documents for these along with your tax id and pan card.
Why you should consider a bank loan rather than other investors?
Banks are easily accessible and present in various regions of the country.
They do not require your equity dilution
They have proper funding structural framework.
They do not ask for profit or share division.
What you should consider before applying?
1. Clarity of business
A clear idea of what, how and when related to your business plans.
2. The expectation of the loan giver
Before lending, you loan a bank will do a detailed background investigation, and yes they will assess your replaying capacity prior to approving.
3. CIBIL score
A good credit score makes the loan easy and quick.
4. Meet with accountant
Once you have clear with your plan, next you need to have an idea that how much money you exactly need, eligibility for a business loan. So planning along with an accountant will be helpful.
5. The requirement of bank statement and balance sheet
A bank statement is required to let your bank know that you are the owner of the business and balance sheet let bank determines your profit.
After your loan gets approved keep in mind to have financial goals to make everything more organized and managed. Also, keep monitoring your business requirement from time to time.