Going through a small Business Loan process can be quite taxing and that’s after you finish researching various options to suit yourself and your business. To add to the pressure, there are various myths that surround the sanctioning of a Business Loan. While you run from pillar to post to get your business funded, these myths are sure to give you a false sense of your eligibility for a loan, thus dampening your spirits. Fear not, as we bust the myths and present the facts to save you from struggling, due to the misinformation that surrounds your search for the right Business Loan to fuel your business.
MYTH 1. Approval of Your Application Takes Forever
Unlike common belief, a complete and a compelling Business Loan application will not take forever to be reviewed. While some applications may take time in case the lender decides to probe deeper before accepting or rejecting the application, most lenders do not take too long to revert to consumers. And if you think filling out the application is cumbersome, you’ll be happy to know that some lenders like Bajaj Finserv allow you to apply for a Business Loan with a click of a few buttons online and grant approval as quickly as in a day! It’s time to put aside your worries and apply for your Business Loan now.
FACT: Your Business Loan can get approval in as less as a day!
MYTH 2. New Businesses do not Qualify
While you may think that only successful and already existing businesses qualify for a loan that is just not true. If you’re wondering how to get a loan to start a small business, here’s your answer: Lenders lend money to new businesses too. It is not necessary to have had a business running for a few years or for that matter even a good credit score in order to apply for a loan. However, a lender will scrutinise your personal finances and credit history in order to examine financial security before sanctioning you a loan.
FACT: New businesses do quality for a Business Loan>
MYTH 3. The Best Way to Get a Loan is Through a Bank
While banks are one of the oldest institutions that offer loans, there is an array of opportunities from different lenders today. Funds can be raised through crowd funding, venture capitalists and grants from organisations and institutions, including the government. Non-banking financial corporations such as Bajaj Finserv also offer Business Loans for up to Rs. 30 lakhs. You can get a small Business Loan without collateral from Bajaj Finserv and avail the ease of paying it off in easy tenures at low rates of interest.
FACT: Business Loans may be availed from a host of lenders including non-banking financial institutions
MYTH 4. The Most Important Criteria to Consider is the Rate of Interest
While the rate of interest on a Business Loan is one of the deciding factors, it is not the only important factor. Pay attention to the lender, the tenure of repayment and the terms and conditions of your Business Loan, and be smart about your loan. It is very easy to get duped while applying for a Business Loan. Offering a low rate of interest is one of the best ways used by con artists to lure you into signing up. Make sure you do your background research and compare all the features of various options before finalising on the one you want.
FACT: Do your background research and look beyond interest rates before you finalise your Business Loan
MYTH 5. The Higher the Loan Amount You Request for, the More Chances of Your Application Getting Rejected
If you believe that your loan application will get approved if you apply for a lesser loan amount, you are most definitely wrong. Financial institutions are known to prefer lending higher amounts as it helps increase their profits in the long run. It is important to evaluate the amount you require and take a loan only for that much. Taking a loan over and above what is required will result in payment of unnecessary interest, whereas taking a loan lesser than what you require will result in major compromises in the operations of your business. In a nutshell, your cash flow should be able to cover your loan expenses.
FACT: Your loan amount request has nothing to do with your application being accepted or rejected
With these small Business Loan myths busted, you are sure to be more confident about applying for your Business Loan. Do your research and consider all your options carefully. Choose a lender who offers you a simple application process, convenient online access to your account, a stress-free tenure and an easy and low rate of interest. This will ensure that you are not hassled by the Business Loan, and can instead use it effectively in your business.