At regular intervals, your business is sure to need finance to meet various needs. For example, you may need external funds to buy new equipment, to pay suppliers, to purchase land or to meet working capital expenses. These situations elucidate just a few reasons why you should apply for a Business Loan. A small loan can help you flexibly finance all kinds of needs with ease, on time. However, to ensure you make the right decision, you need to know how to select the right financing for your small business.
So, follow these steps to ensure that you pick a business loan that aligns with your needs.
Assess your Needs It is best to choose a loan that is customised to cater to your needs perfectly. If you are wondering what types of loans are available for small businesses, you’ll be happy to know that there’s one for every need. For example, for working capital needs you can choose a working capital loan. Similarly, to buy machinery, you can take a machinery loan and as a service provider, you can avail a loan for service providers. Once you understand the type of small business loan that you need and the features that you seek, move on to the next step.
Research the Market The most important stage is to research the market to find a lender who offers you a small loan that suits your needs and is also affordable. This step involves viewing and analysing various loan schemes and comparing them based on their features, loan amount and interest rate.
Choose Loans by NBFCs Non-Banking Financial Companies (NBFCs) also offer loans at a more competitive rate of interest. The benefit of choosing NBFCs is that you can often get a higher loan amount sanctioned. So don’t forget to examine NBFCs while exploring lenders.
For example, Bajaj Finserv offers you a host of Business Loans based on your needs. Each one is easy to apply for, has a high loan sanction, comes with a Flexi Loan facility, quick approval and disbursal, and is available to you on a collateral-free basis. You can also avail pre-approved offers that help you save time and get instant financing. Simply enter your basic details and check out your pre-approved offer.
Calculate EMIs in Advance Simply comparing the interest rate isn’t enough. Once you find a suitable loan, ensure that you determine loan repayment in advance. Using an EMI calculator will help you calculate the EMIs of the small loan in an instant. Once you see the EMI that you will have to pay, you can make adjustments to the tenor and/or principal amount, if necessary.
Review your Financial Ability to Repay While availing a loan is undoubtedly easy, don’t forget that you will have to repay it n time over the next few months or years. So, before you apply for the small Business Loan, it is extremely important for you to check your financial ability to repay it. Ensure that you have a plan in mind that will give you the resources that you need to repay the loan on schedule. To do this, start by examining the data in your company’s financial documents, such as its balance sheet and profit and loss account.
These are some steps that can make the borrowing experience more convenient for you. Following these guidelines will ensure that you are able to find the best small loan and also repay it on time.