7 Things You Must Include in Your Business Loan Application

28 Dec 2018 // 19 min read // Business Loans
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A Business Loan is a very important asset for small or big businesses and once in their lives the owners will have to secure such a loan in order to run their business smoothly. In today’s fast-paced world, there are so many Business Loans available and thanks to the Internet, you can get them in a very short amount of time. However there are certain things you should always remember whenever you are filing a Business Loan Application. If you are a small business owner looking to know the tips for a Business Loan application, you have come to the right place. This article will tell you all the important points you will need to keep in mind to ensure that you get your Business Loan on time.

 
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How do you decide whether you need a Business Loan or not?

This is one question that plagues every small business owner, do they or do they not need the loan? Getting the loan is easy, but finding the right justification requires some bit of research and you should always do this research and thinking before plunging to take a Business Loan. So, before you apply for any loan like HDFC Business Loan, answer these few questions:

  • Why are you in need of this loan? What is the immediate requirement – are you short of funds? Do you need it to buy equipment?

  • Do you have any other debts? Is this new loan necessary?
  • Is your credit score and personal background good enough to help you secure the loan?
  • How much money do you pay for your other loans? Will you be able to afford another one?

If you have been able to answer and justify these questions, then you may need the Business Loan.

Now that you have established that your Business Loan is required, here are the important things you should include in your Business Loan application:

1. Cover Sheet:

A cover sheet is fairly simple but is required to make your application stand out and professional. The cover sheet needs to include your name, your address, your business telephone number and of course the date.

2. Cover Letter:

The cover letter is after the cover sheet and sets the premise of the Business Loan application. In this letter, you should request the bank to give you the loan and your need for it. The second part of this letter should give you a description of the business and the ending of the letter should give the banker a fair idea of how you intend to use this money.

3. Business Plan:

Along with your letter, you should have a strong business plan that describes all the particulars of your business – your company’s description, market analysis, all supporting financial statements, cash flow, balance sheets, strategies including marketing and management. All this will give the bank an idea whether you are a good candidate to be given the loan. Remember, the bank will only give you the loan hassle-free if they think you are not a risk to them. Hence, you should make all your information solid.

4. Table of contents:

This gives information about all the documents you have included in your application and if the bank wants to have a look, they can refer to it anytime.

5. Amount of loan and  intent:

It is crucial to mention the amount of your loan and how you intend to use it. You may have already mentioned it in your cover letter but it’s important to mention it again so that the bankers are clear about it.

6. Financial History:

This gives the bank an understanding of how much you can be loaned and whether or not you will be able to give this to the bank.

7. Collaterals:

If you plan to take a secured loan, you will have to give the bank a list of the collaterals you can guarantee them. This will give you a lower rate of interest. In case you plan to take an unsecured loan, which will have a higher rate of interest, you will not have to give any collateral.

Thus, here are the most important things you should include in your Business Loan application in order to ensure that you get the best possible loan and in a short time.

Also Read: 5 Business Loan Basics Every Start-up Owner Must Know

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 70+ Banks and NBFCs. We have served 2 million+ happy customers since 1989.

 
 
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