As an entrepreneur looking out to start a new business or expand your existing enterprise, taking a business loan is often unavoidable. After doing your preliminary research and narrowing down companies you’d like to take a loan from, nailing your business loan application is a must. If you’re wondering how to crack your business loan application, we have a few suggestions. With these simple must-dos, you’re sure to make your application appealing, thus ensuring that your application makes the cut.
The first thing to consider when you apply for a business loan is creating a short profile of your business. Tell your lender what the business is about. Give a gist of the operations you carry out, an overview of your clientele and your employees. Offering a brief about your business finances may also help your application. If your company has a strong financial background and you’re looking to expand further, your finances will earn your brownie points. In addition to your company’s philosophy and history, mention the loan amount you’re seeking and what use you want it to be put to. Adding this as a cover letter to your application will force the lender to review your application. Since this is the first interaction you’re having with the lender, make sure your profile sounds confident and compelling.
Your Credit Score
It’s a well-known fact that a lender is going to go through your financial statements and analyse your credit score before offering you a loan. As credit history can vary with respect to the field of your business, a lender may look into your personal credit history. Thus, it is important to keep in mind that not only is your business under scrutiny, but so are you. If you’re just starting out, a lender will definitely look into your (and your partner’s) credit history so as to gain a sense of your financial status. If you have successfully upheld financial obligations in the past, you are more likely to be sanctioned a loan.
Also Read : The Fundamentals Of Your Business Credit Score
Your Company’s Revenue
Before lending money, the lender has to make sure you can repay the sum at the end of the tenure. In order to do so, the lender may look at your profit and loss account in order to analyse your revenue. If your company seems to have enough revenue and a healthy financial state, there are more chances of your loan application getting approved. If you’re looking for a loan to start a business, the lender may have a look at your personal finances and other sources of revenue, if any.
Collaterals and Guarantors
Most lenders look for a security against your loan. Thus, mentioning assets you own that you may pledge as collateral to your loan can help boost your business loan application. This adds a sense of security in the minds of the lender thus increasing your chances further. While most lenders do ask for collaterals and guarantors, Bajaj Finserv’s business loan doesn’t need either. So if you do not want to offer any collateral or do not have a guarantor, research business loans from lenders that do not require them.
Your Business Savings
It is always a good idea to show lenders the money you’ve set aside. It may be savings in the books of the business or in your personal records. This shows that not only are you serious about investing in the business, but you’re also financially sound and safe. Showing savings makes the lender believe that you manage your finances well and thus have a greater probability of repaying the loan. It thus plays an active role in getting your business loan application approved.
Gone are the days of visiting a bank or physically going to a bank or financial institution to apply for a loan. You can now complete and send in your business loan application online. If you’re looking for online loans to expand business or start a venture, you are sure to find solutions to your problems with Bajaj Finserv. With an easy application process and a quick review process, Bajaj Finserv provides you with the convenience of applying for a business loan just with the press of a few clicks.