How to get a business loan to start a new business in India?

India has a rising ecosystem of startups. New ideas are turning up into ventures and the sphere of business is experiencing some amazing transformation. However, startups have a very common problem and that is capital. To sustain and grow, the need for capital for a business can never be denied. It becomes very important to get hold of a smooth source of funds so that all areas of the business can be developed equally. A business needs funds for staffing, technology, machinery, infrastructure, and working capital. A business loan is always a lifeline to such small businesses that need immediate funds. How to get a business loan? It is easy to get a business loan if one meets all the eligibility criteria. There are some general eligibility criteria set by loan providers for fulfillment. If you need a small business loan, you need to meet the eligibility criteria.

  • A business and personal credit score above 750: A business credit score above 750 makes borrowing easy. If you have a bad business credit score, make sure you tidy up your score. There are times when a loan provider can offer you a loan based on your personal credit score. For a new business, you will also need a good personal credit score as your business credit will not be sufficient. Keep it in place, while you work on improving your business loan credit score. Without a good business credit score, it becomes difficult to get a business loan easily.
  • Line of products: If you are new, try to explore the right line of products that are successful in the market. The loan providers are always keen to invest in a business that has future prospects. Go for the products that are famous and moving well in the market.
  • Increase your income before you apply: If you think that you will need to invest in your business in the future, start by increasing your income. A loan provider will always focus on your cash reserve and your income to find out your loan repayment capacity. If you have a good income, you automatically become an asset for the loan provider. Make sure you increase your income and show a good record of finances.
  • Keep your cash flow positive: If you need a loan from a financial institution, make sure you show a positive cash flow statement. The cash flow statement is checked by the loan provider to have a detailed observation of the transactions taking place in the business.
  • A good business plan: Being a startup, you surely do not have a lot of experience and exposure in the market. You need to have a solid rock business plan that can help you convince your loan provider. A business plan can convince any loan provider if he finds it worth investing in.
  • Add collateral: A small business is not easily trusted by any loan provider. You will need to attach collateral to your loan and secure it. With collateral, you can easily get approval. When you include collateral, you will be able to avoid risk and obtain approval. There will not be any hassle with borrowing when you look into borrowing a secured business loan.

Finishing up

How to get a business loan? When you visit Clix Capital, you will get the option to borrow using the digital platform. Get an affordable and small business loan so that you can meet your business needs well. It will help you get the right borrowing experience.

Must Read: Tips to Reduce EMI Payments on Your Home Loan

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