With the easy accessibility of business loans and numerous lending options, small business owners are in better position these days. But before making the final decision and taking the business to the next level, you must ensure that you are moving in the right direction. It is essential to achieve the intended targets.
Earlier, getting a business loan in Delhi or any other city was difficult and like running from a desk to another. It included compiling a large number of documents and waiting for months to get to the loan sanctioned and disbursed. But today, the online business loan requires minimal documentation and is disbursed within a few days.
A business loan is typically availed to expand the business, buy machinery or equipment, purchase inventory, increase working capital, etc. Finding the best business loan at a reasonable interest rate requires a reasonable amount of research on your part.
It is crucial to consider financial capacity before deciding on the business loan amount. If you avail a loan of more than your requirement, you will end up paying extra interest charges. However, if you avail a loan less than your requirement, it will not serve your purpose.
Let’s us now discuss the checklist for a business loan application.
Business Loan Application Form
The application form varies from the lending institution to another. But they all ask for the same information. So, you need to be prepared to answer all the questions. It is a good idea to have information handy before you fill the loan application. The following are the questions generally asked:
- Why are you applying for a business loan?
- How will you repay the loan amount?
- Do you have other loans going on your name?
- Information related to personal background
You will require to provide some personal information, such as postal address, PAN and Aadhar card, etc.
Many loan lenders require a sound business plan to be submitted along with the loan application. The business plan must include a set of financial statements, PNL account, cash flow, and balance sheet.
CIBIL score is also an important eligibility criterion that is considered by every loan lender. He obtains the same as a part of the loan application process. However, you must also obtain the same and look for inaccuracies that are bringing your score down. It is vital to have a high credit score to avail a business loan without security.
Business Loan Documents
The following are the business loan documents required to be submitted along with the loan application form:
- Identity Proof: you need to provide identity proofs, such as Aadhar card, PAN, voter’s identity card, etc.
- Residential Proof: this is also a critical requirement. You need to provide residence proof – electricity bill or rent agreement.
- Age Proof: some lenders also require age proof, which can be supported by photo PAN card, passport, voter’s card, etc.
- Financial Documents: you need to provide the income tax returns of previous 2-3 years, bank statement for at least nine months, profit and loss sheet, and balance sheet. Also, you may need to audit the PNL account by a qualified chartered accountant.
- Track Credit Score: it is vital to know your credit score before applying for a business loan in India. Lenders check your creditworthiness and capability to repay the loan based on your credit score. A high credit score increases the chances of getting the application approved.
- Get the Documents Ready: once you know all the documents required for a business loan, get them at one place. You can get their photocopies or get them scanned to make an e-copy.
Apply for a Loan
Once you have all the documents at the place, next, you need to apply for a business loan. For this, you need to find the right loan lender as per your needs and requirements. You will have to research online the various business loan lenders operating in your city.
Shortlist them based on their documentation requirements, eligibility criteria, terms and conditions, and other such aspects.
This will help you not wasting time by applying for a loan with different lenders but to the right one only. If you ensure that you meet all the requirements, you will get an easy business loan. Notably, the online loan lenders have an easy process which will also help you avail a loan in a hassle-free manner.
You can apply for a small business loan on various online lending platforms, like ZipLoan. We offer loans at a reasonable rate of interest and require minimal documents. Besides, there is no need for you to visit us in person and you can apply for a loan for business online on our website.
Firstly, complete the loan application form and upload the PDFs of all the required documents. Our executive will call you to assist you with the loan application process further. Also, we offer unsecured business loans. Thus, there is no need for you to hypothecate asset with us.