Finance is the essence of a business. No business can grow with insufficient funds. There are many ways of funding a business. One can invest his resources or borrow money from lenders. The best way for funding a business is to avail of a business loan.
A business loan is an unsecured credit that one can avail of to meet business requirements. There are many types of business finance available in the market. Getting the right kind of finance for your business often depends on your business loan plan.
Here are certain things that you should include in your business loan plan!
1. Strategic and financial details
A good business plan always defines the company’s strategies and financial projections. It should also include the company’s profile and financial statements. One should mention the market analysis and future strategies. It is to make the business plan clear and easily understandable.
2. The amount and purpose of the loan
The amount of loan is the most important part of any loan application. It is also necessary to mention the purpose of the loan. There are many types of business finances. One can avail of a loan for establishment, expansion or working capital needs. Specifying the purpose makes it easy for the lender to make a decision, and it even saves time.
3. Credit report
The credit score is one of the most important criteria in loan approval. Lenders always ask for the borrower’s CIBIL score to check his credibility. Before making a loan application, one should always check his credit score. This way, one can improve the credit score beforehand and apply confidently. To avail of a business loan, a score of 750 or higher is considered ideal by the lenders and applicant with a decent CIBIL score can secure a loan at a competitive rate of interest.
4. Legal documents
Legal documents are a significant part of a loan application. One should always keep the legal documents in place. The lender may ask for legal documents as per the loan plan. Incorporation documents, business licenses, rent/lease agreements and third-party contracts are important.
Many lenders provide collateral-free loans. You can get a business loan in Kerala without security. Yet, it is important to mention all the collateral that you can provide for the loan. Collateral security reduces the risk borne by the lender. It can help you in getting a loan at better terms and conditions.
6. Details of managing team
The business team can also make a difference to your loan application approval. If there are people with good rapport in the management team, it creates a positive impact on the lender. One should mention the details of the management, operational team and financial consultants.
7. Bank statements and income tax returns
Bank statements of a running business enterprise give a clear picture of its financial condition. An applicant should always include personal and business bank statements in the loan application. A business loan application should also include income tax returns.
8. Details of other business debts
A business enterprise might already be having debt. It is important to give details of existing business debt. It lets the lender know the repayment capacity of the borrower. There are many other factors that a borrower may include in a business loan plan to make it a sound one.
A genuine business plan with all necessary disclosures and facts can help one in availing the required business loan. Now, that you know the basic things required to avail of a business loan, you can easily apply for an advance from leading financial institutions at affordable rates and simple terms.
One of the leading lenders, Bajaj Finserv also presents pre-approved deals on business loans, home loans, personal loans and more. It is to simplify the loan processing and make things faster. You can share your basic details like your name and mobile number to unlock your pre-approved loan offers now.
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