Do you want to expand your business or launch a new product? Having a good source of capital makes it easy to fund such expenses. Business Loans are a sure and quick source of financing for your business needs.
You can quickly get a Business Loan from Non-Banking Financial Companies (NBFCs). However, you must meet the lender’s Business Loan eligibility criteria to get the loan. Begin by finding out the amount your business needs. When you know the exact figure to borrow, check the available lenders.
Make sure you research borrowing rates and terms before finalising any loan provider. You should also check the documents required for a business loan before applying. You can also check the business loan eligibility calculator, this is a great tool to get the interest rate for your loan.
4 Business Loan Qualification Requirements You Should Know
Age Requirement
Age is one of the factors financial services providers check before approving a Business Loan application. You don’t qualify for a loan if you are less than 21 years. In addition, you should not be older than 65 years by the time your loan matures.
Good Credit History
Your creditworthiness matters a lot when seeking a Business Loan. Lenders extend loans to borrowers with good credit history. When applying for a Business Loan, your financial provider will check your business and personal credit score.
A credit score helps to determine your ability to repay your loan. Therefore, your Business Loan application is approved quickly if your score is excellent. You also have a chance to secure a Business Loan with the lower interest rate when your credit score is according to the lender’s requirement.
Lenders do not ask for the same credit score to offer you a Business Loan. Instead, the level of credit score varies from one lender to another. For example: Clix Capital provides loans on a minimum Experian credit score of 750. You may take a few steps like timely repayment of existing loans to improve your score if it’s low.
Business Age
Years in business are also critical factors in determining a Business Loan eligibility. Many lenders will require your business to have been in operation for three years before approving your loan. The existence of your business isn’t enough to secure a loan. Your business should have been making a profit within those years.
You will be expected to provide documents required for quick business loans like balance sheets and financial statements to show your business existence. If your business does not make profits, you will find it hard to qualify for a loan from many lenders.
Business Loan Documents
Before your Business Loan is approved, there are several documents you should provide, both personal and business.
Documents showing your identity, income, and address are pretty essential. You can show your PAN card, Aadhaar, driver’s license, or government-issued ID.
On the other hand, you need to show your business license and registration. You should also provide financial records like account statements and balance sheets. Tax return evidence is another document you should have for your loan to be approved.
Conclusion
Get a Business Loan from a financial services provider with easy-to-access eligibility criteria. Ensure you have the required Business Loan documents when applying for a loan. Make sure you maintain a good credit score for loan eligibility. Remember that a good credit score qualifies you for a low-interest rate loan.
