5 Important Considerations When Taking A Business Loan For Engineers
Taking a professional loan for engineers is the ideal option when you experience a financial crunch in your engineering business or sense a big opportunity on the horizon. Consider the following points to ensure that a loan is the right choice for your business:
1. Know How The Money Will Be Used
Before taking a loan, create a detailed roadmap where you assign different heads the funds they need. Additional funds are always required in any business and can help to:
- Negotiate better with your suppliers.
- Fund operations in case of a cash shortage.
- Fund the expansion of the business, which may include a marketing push, hiring additional talent or buying more equipment to enable higher earnings.
- Fund the immediate needs; for instance, when critical machinery breaks down and expensive repairs are required.
- Market and/or promote the business.
- Finance a bigger office or a workspace.
- Hire additional talent
- Buy new tools and equipment
2. Meet The Eligibility Criteria
The eligibility criteria for a professional business loan for engineers include the following:
- You need to be self-employed or a consultant engineer
- Your business or consultancy vintage should be at least 3 years
- You need to have graduated at least 5 years before applying for the loan
- You should be aged between 26 and 65 years
3. Check the Documentation Required for A Business Loan for Engineers And Keep Them Ready
Every loan requires you to submit a list of documents. When you opt for a customised loan for engineers, you only need the most minimal documents:
- Completed application form
- Photograph of the applicant
- KYC documents (for both applicants in case of a joint loan)
- Certificate of practice as business proof
- Details of the engineering degree
- Business vintage proof
Keeping these documents ready will quicken your application process, as once you apply and receive the initial approval, you will need to submit them for verification.
4. Plan the Repayment of the Loan Well in Advance With Contingencies in Place
When you take a professional engineer’s loan you need to have a concrete repayment plan, so you don’t delay your EMIs and also maintain a good credit score.
Keep alternate means of repayment ready, such as personal savings or investments that may be liquidated quickly, in case of a business slump.
5. Decide on the Type of Loan You Want To Avail
Avail a customised loan for engineers, by further opting for a line of credit rather than a term loan. With this facility, you are given a credit line for a period of time. You can withdraw money as required from this line of credit and are liable to pay interest only on the amount borrowed. There is no interest charged on the unutilized principle. Further, the interest payment does not include repayment of principle. The principle needs to be repaid only at the end of the term of the loan. You are free to withdraw money as many times as you wish from the line of credit during the duration of the loan. This helps you manage your cash flows better and tackle unpredictable needs for finances in a hassle-free way.
Apply for a fast and easy Loan for Engineers from Bajaj Finserv. One of India’s fastest-growing and biggest NBFCs, Bajaj Finserv offers easy online application, funds up to Rs.15 lakh and business loans that require no collateral. To know more, SMS ‘ER’ to 9773633633 or give a missed call at 1800 209 4151.