As a small business owner, you would agree with the fact that you are always in need of more funds. This requirement for funds could be due to the late realization of payments from buyers or expenses incurred for the expansion of the business. Whatever may be the reason behind your requirement or more funds, the fact of the matter is that you need to have ready to access the source of funding. This fund source you can tap-in whenever the need may arise. Well, the most common source is savings. But most business owners invest all their savings in the initial stage of the business. Thus, they are left looking for other sources of funds.
Nevertheless, even if you still have enough funds in your savings account, is it the right approach to use the savings kept aside for bad times. What if there comes some other emergency situation after a few months? This can be in personal life as well. How would you deal with such a situation? You will be left vulnerable with no savings to fall back on. Therefore, you must use personal savings wisely and keep it only as a last resort.
Thankfully, small business owners, these days have another reliable source of funding at their disposal, in the form of financial institutions that offer an unsecured business loan. There are numerous financial institutions in India whom you can approach for your requirements, such as public and private banks, NBFCs, and Online Lending Companies. Out of all the available choices, NBFCs and online lending companies have become the ideal and go-to-go options for business owners looking for small business loan instantly.
NBFCs are online lending companies that operate through their website only. These companies have taken the concept of convenience for borrowers as their priority. They enable the applicant to apply for a business loan from the comfort of the home or office. Their eligibility criteria are straightforward to meet. If the small business has an annual turnover of more than Rs. 5 Lakhs, then they are sanctioned small business loan with instant approval, ranging from 1 to 5 lakhs. The maximum repayment tenor that the applicant can opt for is 24 months. Notably, there is no need to provide collateral to back the business loan amount. The applicant can use the loan amount for any business-related requirement as per his requirements.
These companies offer a paperless process. You just only need to provide the soft copies of the documents required by the lender. Most loan lenders prefer PDFs as it allows them to process the application faster. Besides, they have minimal documentation requirement, ensuring that the applicants get easy access to loans. Their easy eligibility criteria ensure that most loan applications are approved and disbursed within a few days.
Moreover, they also offer the option to prepay the loan amount before the last date of the tenure. They don’t charge any prepayment penalty after the payment of 6 EMIs. In a nutshell, NBFCs follow easy criteria to process the loan application, and they have easy to meet terms and conditions.
Tips for Instant Small Business Loan Approvals
Though NBFCs follow flexible eligibility criteria, still there are certain processes that they follow. Thus, it is important for any applicant to prepare a complete business loan application proposal to ensure instant approvals.
Here are five important tips to help you enjoy instant approvals for your small business loan application:
- Assess your Eligibility: online lenders have specified their eligibility criteria for the business loan products online on their website. So, before starting the loan application process, it would be a sensible decision to assess the eligibility against the eligibility criteria specified by them. You must proceed ahead with the application only if you meet all the specified criteria. Otherwise, it would be a sensible decision to wait for some time and prepare the profile according to the requirements.
- Keep your Documents Ready: you must keep PDFs (soft copies) of the documents ready on the email or the computer. It would help in providing documents at the earliest without any last-minute rush to arrange for the documents. As NBFCs offer the option of upload the required documents online, having scanned copies will really accelerate the entire loan process.
- Know your Requirement: Do not go for the maximum available amount blindly. Understand the requirements and borrow the amount that you Significantly, a small business loan is borrowed funding that comes with interest and other costs. There is no use paying interest on the amount while keeping it lying idle in the bank account. Just make sure that your eligibility amount is higher than the amount you have applied for, to ensure quick approvals.
- Prepare your Financials: most online lenders look at other financial factors in addition to the credit score to determine your eligibility. Therefore, you must ensure that your financials in excellent shape. You should ensure that there are no cheque bounce instances in bank statements, timely filing of GST returns, timely payment of EMIs, timely filing of income tax returns, etc.
- Check Your Credit Score/Report: you are entitled to a free CIBIL report once a year. So, ensure that you use this facility and check your CIBIL report regularly for any errors. If there are any errors, such as loans that do not belong to you are mentioned in your report or loans written off in the report whereas they have been paid in full, etc. Raise the dispute with CIBIL and get it rectified. A clean credit report with no defaults will go a long way in the speedy approval of business loan application.
Just follow these tips while preparing your application for an instant business loan and be assured that your application will be approved on an instant basis.