When Is the Best Time to Start Your Small Business Loan Search?
Altaf Siddique, owner of a mid-sized garment manufacturing company in Ludhiana, was ready to invest in a new technology. To fund this, he was figuring out options, both offline and online. “Flexible repayment options at competitive interest rates were my focus,” says Altaf. He is one among several small business owners in India, driving growth through job creation and wealth generation.
Contributing to 60% of the total private sector output and over 45% of the country’s GDP, SMEs play a dominant role in the Indian economy.
“The right timing for seeking and securing credit makes the difference between success and failure,” notes loan planner Subash Apte. Seamless flow of credit is the lifeblood of your business. Thus, you should know when to look for financial help for your venture.
Listed below are a few scenarios that may be helpful in planning the right time for taking a small business loan:
- You Have the Perfect Growth Strategy
“Money sitting idle is no good to anyone. Before qualifying on your small business loan eligibility criteria, you must have a ready strategy for the deployment of funds,” points out Subash.
You need a pragmatic and productive strategy for deployment of funds. A plan focusing on spending on advanced machinery and permanent premises is sounder than spending on interior decorations.
- You Need Fresh Talent
A business is as good as the people who work for it. Your employees provide you that innovative edge to ace the market. You may consider taking a business loan if it’s time to infuse new blood into your operations who are adept in the emerging fields of technology or managerial practices.
You may also opt for funds to improve the quality of your human resource. For example, Big Data, a very promising technology, lacks quality professionals. If you invest on experts in Big Data, you may reap rich dividends in the long-run.
- You Have an Excellent Business Opportunity
Facebook founder Mark Zuckerberg believes the biggest risk is not taking any risk. Note that in a competitive business environment, opportunities are short-lived.
“As a small business owner, you must keep yourself updated with the changing socio-economic and political scenarios and do not hesitate to apply for a loan to convert an opportunity into business. After all, opportunity knocks but once,” quips Subhash.
- You Need to Stock Up
Maintaining the right inventory is a challenging task. It’s crucial if you don’t want to fail to take the advantage of the market demand. Building up inventory requires a seamless supply of funds and a small business loan may ease your concerns.
Subhash notes, “To make your exercise fail-proof, analyse the cost of funds against the sales figure of the previous years and the projections of the present year. Also consider factors such as seasonality, Government regulations, and current politico-economic conditions to make your planning realistic.”
- You Can Invest in New Technology
Your business thrives on technological innovations. A loan invested in an advanced ERP system may save a lot of cost by streamlining time-consuming and inventory management processes. “My technological investment has cut down operational and management cost manifold, giving me an edge over my rivals,” says Altaf.
- Your Documents Are in Place
To stay competitive, you need to negotiate several legal and regulatory challenges. Getting the documents cleared is half the job done. So, you may need to consider when your documents are ready and available for small business loans. Proper documentation will expedite your loan application process.
We at Bajaj Finserv, need the following documents to process your business loan:
- Passport size photograph
- KYC documents
- Certificate of business existence
- Other relevant financial documents
- Bank account statement of previous month(s)