All You Need to Know about Getting a Business Loan in Delhi
In the present day scenario, a large number of fresh Graduates in the Capital and for that matter, in each of the metro city are skipping the 9 to 5 job, in a bid to achieve something more significant, both in terms of money, and that with respect to the satisfaction they derive. Of course, this is easier said than done, since business ventures not only require relentless hours of work, fighting the competition, and making a respectable space in the market, but also need a consistent flow of cash to maintain the day-to-day operations, and scale the business functions.
In most cases, entrepreneurs first rely on their savings to kick-start the venture, however, when the funding needs grow bigger than their pockets, conventional wisdom takes them in the direction of procuring Business Loans in Delhi. Today, the leading commercial banks, as well as NBFCs, readily offer Business Loans to new as well as established businesses, making it much easier for one to acquire the desired amount of funds.
If you too are planning to Apply for a Business Loan in Tier 1 or Tier II City, read on to brush up our knowledge about this highly sought after credit type.
Business Loan – Why Do You Need It?
When it comes to offering a business loan, most lenders exercise extreme caution for the simple reason that there is no fool-proof way to judge the probability of success of the business venture, or of one of its many projects.
It is for this very reason that it becomes your onus to showcase a valid reason for seeking the loan. Before you approach a lender, you must have a full-fledged project plan ready with you, complete with the estimated amount of funds required for the same. In addition, you should be able to convince the lender about generating revenue from the plan; preferably with a fair estimation of the time, it will take to create the cash flow.
Only when the lender is fully convinced of your need for the loan, as well as your ability to repay the same, will they consider approving your loan application. Even when they are convinced, they will need you to furnish certain documents before making the final call on your business loan approval.
Documents Checklist for a Business Loan
Your Bank Account Statements offer proof of your income for the business to your lender. It also assures the lender that you are entitled to the profits of the business. To this end, having frequent and consistent income, that shows up in your bank statements will prove to be in your favour, by exhibiting your ability to repay the loan.
The Balance Sheet is yet another document which will help the lender assess the financial standing of your business. Based on the Balance Sheet, the lender can conveniently assess the profitability of your business. In this case, you must hire a professional Accountant to manage your Balance Sheet. Not only will it help maintain accuracy, but will also leave a lasting impression on the lender.
Profit and Loss Account
The lender will assess this document in a bid to understand the worth of your business. In addition to the Bank Statements and Balance Sheet, P&L Account Statement also acts as a proof of income, and that of the loan repayment capacity of the business.
While you will not be required to furnish a copy of the same, you must be aware of the fact that your lender will draw your personal credit history from one of the three leading Credit Bureaus of the country. Your score will help the lender analyse your creditworthiness, and your repayment behaviour will let them know whether you are a responsible borrower or not. To this end, it is advisable to have a Credit Score of 650 or above, before applying for a Business Loan.
Income Tax Returns
Filing regular tax is perceived by the lender as a sign of a profitable venture, and a responsible one indeed. Our lender will ask for the Income Tax Returns of the past 2-3 years, and hence, you must ensure that your returns were filed on time. This will prove to be of great help when it comes to getting an approval on your Business Loan application.
In most cases, commercial banks are more likely to offer loans to businesses which have been in existence for at last 2 years or more, in order to understand the stability and creditworthiness of the business. To ensure this, you may be asked to furnish documents proving the commencement date of the business and the incorporation certificate.
Useful Tips for Applying For a Business Loan
When you are on the lookout for a Business Loan in Delhi or any other metro city of India, we recommend you adhere to the below-mentioned tips, in order to get quick and hassle-free approval on your loan application.
Monitor the financial health of your enterprise at regular intervals.
Ensure that all your tax and loan payments are timely made.
Maintain your Balance Sheet and P&L Accounts.
Have an accurate project plan in place, complete with profit forecasting, before approaching a lender.
Assess your capacity to take and repay new debts.
Have clearly defined long term and short term goals in place.
Maintain a healthy relationship with lenders and customers.
Do not use your resident house and such huge personal assets as collateral for a Business Loan.
You now have a comprehensive idea about getting a Business Loan. So, wait no more and search online for lenders that best suits your needs and apply for that much needed financial boost for your venture, today!
To apply online for Credit Cards, Secured Loans and Unsecured Loans, visit www.mymoneymantra.com, the leading online lending marketplace that offers financial products from 90+ Banks and NBFCs. We have served 4 million+ happy customers since 1989.
Talk to our Loan Specialists toll-free at 18001034004 to know more about our products and offers.