Small Business Lending Advice While Applying for a Business Loan – Every Indian state is economically independent to generate its own revenues over the years. However, the cultural and social diversity influences the presence of small and medium scale industries across the nation. The MSME sector has been on the rise of late and contributes a significant share in the overall national GDP of India.
For instance, the state of Telangana is an agriculture-fuelled economy which has seen a rise in small businesses over the past few years. While the people of Telangana are slowly taking up small businesses as first-generation entrepreneurs, they are also helped by multiple lenders offering ample external financing opportunities.
A growing business may require these funds to meet a variety of needs like on-time procurement of raw material, daily wage payment, etc. Such requisites can be conveniently met by availing a business loan in Telangana. Financial institutions like Bajaj Finserv bring this easy financing option with a high-value, collateral free loan amount of up to Rs. 30 Lakh.
Now, have a look at these suggestions that can help you avail a business loan for your small business more quickly.
Lending advice that helps to avail a business loan in Telangana:
1. Create a proper business plan
You must plan your credit strategy just the way you do before undertaking any critical business decision. A well-thought-out growth plan for small business helps clear the roadblock to acquiring necessary funds.
A concrete plan for expansion of your small business also conveys a positive image on the lender you approach for a business loan. Your business plan may include the following pointers, which will give a clear understanding of your expansions and how you are going to manage your finances.
- Overview of the company’s plan
- Analysis of the market and its expected trends
- A well-defined financial projection for expenses required and expected revenue generation
If your business falls under the category of MSME, you may also look forward to applying under the MSME loan scheme offered by various lenders to increase your chances of approval.
2. Focus on improving your credit score
Your credit score is a reflection of your financial management skills. It represents your creditworthiness to the lender. While you seek funding for your small business, your lender will also take into consideration your credit score for evaluation. A low credit score is also one of the reasons business loan gets rejected.
On the other hand, a good credit score of 750 and above helps build confidence and shows your credibility as a borrower. Therefore, before applying for a business loan in Telangana, focus on improving your credit score. Some easy ways you can follow –
- Keep your payment history strong by repaying debts on time
- Try maintaining a credit utilisation ratio at approximately 30%
- Pay all your utility bills and expenses before the due date
- Do not go for multiple loan applications
- 3. Check if you meet the eligibility criteria
Lenders specify the eligibility criteria you must meet to avail a loan. Before you apply for the loan, check the basic eligibilities you are required to meet for loan approval. Be it a loan under the MSME loan scheme or any other, a business vintage of over three years is a must to avail a business loan. Check other eligibilities and apply.
4. Be ready with the necessary documents
Speed up the approval of your loan application by keeping the required documents handy. Here’s the general checklist of documents you would require to submit.
- Proof of identity
- Proof of address
- Bank account statement
- ITR for 2 or 3 years along with necessary financial documents
- Business’s continuation proof
- 5. Have a fool-proof repayment strategy
A proper debt repayment plan backs up your loan application and helps get hassle-free approval. So, figure out this plan before you approach your lender for a business loan in Telangana.
Now, you can confidently approach your lender to avail credit for your small business. Make sure to cooperate with them during any verification with complete transparency. Follow the above suggestions to avail the loan conveniently.
