Top 3 ways to improve your odds of getting a loan for small businesses in 2019
With 2019 emerged successful entrepreneurs striving to buzz the market with their efforts. In order to succeed in the market and grow, these companies need financial support. Most companies interested in availing business loans, spend a majority of their time contemplating on how to increase and enhance their chances of being eligible to get a loan. By staying prepared and having the right information before applying for business funding, this process could get very easy for you.
Following are the top 3 factors that should be considered by the business owners:
- Get the documents ready: Documents play a very crucial role in defining the overall chances of your company getting the loan approved. Few of the most important documents are as follows:
- The certificate of the company’s registration under the applicable law.
- The partnership deed in the case of a partnership firm.
- The mutually agreed and accepted proof of share allotment.
- The financial details of the company that primarily contain the details of the money accounted, including the company’s financial statements.
- ITR statements.
- GST certificates, usually for the last three years.
- The transaction history of the company’s account.
- All the necessary bills including electricity, water, rent bills etc.
- The audited copies of all the financial details that may be presented.
- Improve Business and Individual Credit Score: Since unsecured business loan online require no collateral, the lenders need to ensure that the credit score of the company or the individual owner is good enough. The credit score can give an insight to the lender about the borrower’s individual and business’ financial capabilities to repay the loan. If you have an impressive credit score Fintech companies will be more than willing to provide you with a loan.
- Prepare a detailed business plan and project report: It is recommended to have a detailed business proposal and the project report that should specifically highlight the following sections
- The aim of the business.
- The growth plan in the next few years.
- The vision of the company.
- The vision of the endeavor.
- The employment generated and the scalability.
- The level of business performed.
- The investments that are already made in the company.
- The areas where the company is suffering because of the financial impediments.
- The level of outcome that may be expected of the business if the financial support is received.
Documentation is considered for verifying the applications received and hence all the required papers should be submitted to the lending institutions. CIBIL score and credit history are considered before granting the loans as no security or third-party guarantee is involved these become sole necessity of lenders. Having a well-defined business plan and project report i.e. vision and mission of the company and the goals your organization is looking to achieve should be mentioned in the application.
Today Fintech companies are constantly trying to find eligible candidates to provide business loans to. They have made the application process faster and easier to make it convenient for the loan applicants. That being said, you can make this easier for you and the lending companies by being prepared. This will avoid any unnecessary complications and help speed up the process.