Running your own side business can be rewarding, but it often holds people back due to financial constraints. Whether you are running a business from home or offering online services, it could turn into something bigger if you get the right financial support. Fortunately, business loans offered by several online financial institutions help side hustles or part-time businesses to scale and expand their businesses and even cover daily expenses. It gives you the financial boost that you have been looking for to grow your company.
This guide explores reasons to take a loan for business, the process of applying online, the eligibility requirements and tips to increase your chances of getting quick loan approvals.
Reasons to Apply for a Loan for Business
Taking a loan for business can help entrepreneurs by:
- Invest in equipment and expand your business operations.
- Bridge cash flow gaps and ensure enough funds to cover daily expenses.
- Owners can use the funds to market their businesses and expand their reach.
- A business loan amount can be used in an emergency, like urgent repairs or to cover other unforeseen expenses.
Types of Loans for Business
Here are some of the common types of loans you can take for your business:
- Term Loan: A lump-sum amount of money often taken to purchase fixed assets.
- Working Capital Loan: To cover day-to-day expenses like payment of wages or rent.
- Equipment Loan: A loan specifically taken to purchase business equipment.
Eligibility Criteria of Business Loans
Applicants must qualify for the eligibility criteria provided by lenders when applying for a business loan online:
- Age: The applicant must be at least 22 years of age.
- Nationality: The applicant must be an Indian citizen.
- Credit Score: To get quick loan approval without hassle, ensure that you have a good credit score (potentially more than 650).
- Business: The business should be operational for at least 2-3 years.
- Profitability: The business must be profitable for the past 1-2 years.
Please Note: The criteria mentioned above are basic, please check the eligibility of the lender that you choose.
How to Apply for a Business Loan Online?
Follow the below steps when applying for business loans:
- Choose a trusted online lender by comparing their terms and conditions, rate of interest, and eligibility requirements.
- Check the eligibility requirements and gather the necessary documents, such as proof of identity (Aadhaar or PAN card), bank statements from the past 1-2 years, income tax returns, business registration documents, and more.
- Download the lender application on your smartphone and create your account by providing the required information.
- Fill out the business loan apply form and make sure to double-check all the information and upload all the necessary documents.
- Once your application is approved, the funds will be disbursed to your bank account.
Tips to Increase Your Chances of Getting Fast Loan Approval
Consider the following tips to increase your chances of getting quick loan approvals:
- Improve your CIBIL or credit score by paying off your existing debts and avoiding applying for too many loans in a short period of time.
- Clearly define your business plan by outlining all the information, including market trends, target audience, and expected revenue.
- Gather all the necessary documents and make sure the information is updated.
- Ensure that you qualify the eligibility criteria when applying for a business loan online.
- Avoid overborrowing the funds as it can lead to high rates of interest, and underborrowing to prevent insufficiency of funds.
Final Thoughts
Applying for the right loan can take your business to the next level. The loan application process is quite straightforward, when it’s done the right way. Make sure you choose a trusted online platform like Bajaj Finserv, when applying for a business loan. Bajaj Finserv is a one-stop and user-friendly platform that offers 100% online loan application, flexible tenure, and charges no hidden fees.
So, if you are ready to scale your business, then make sure to follow the above tips and explore your options today.
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