Get a Small Business Loan in 5 Steps

Get a Small Business Loan in 5 Steps

Getting a business loan helps in starting or maintaining your company. Although tough lending standards can be made more difficult, learning to navigate the process ahead of time will help you succeed.

Here we will show how to get a small-business loan in five steps.

1. Determine if you qualify for a business loan

These question help to determine if you can qualify for a small business loan:

What’s your credit score?

Banks prefer to offer low-rate business loans to borrowers with credit scores above 680 at least. If your credit score down below that threshold, consider small-business loans for borrowers with bad credit scores or loans from a nonprofit microlender.

How long have you been in business?

Lenders will think about how long your business has been operating. You need to have been in business for at least one year to qualify for most online small-business loans.

2. Decide what type of loan you need 

You want to start a business – Lenders demand cash flow to support repayment of the loan, so companies in their first year typically can’t get business loans. Instead, you’ll have to depend on other types of startup financing, like business credit cards and personal loans.

You want to manage everyday expenses – a business line of credit may make sense. This flexible kind of money taps you into the financing as needed to cover unexpected expenses such as payroll or repairs, offering you the necessary safety nets.

3. Compare small-business lenders

There are three main sources for getting small-business loans: online lenders, banks, and nonprofit microlenders. Each typically has multiple products, but one may be better in certain instances than others.

4. Gather your documents

Make sure you have all the required documentation. Locating these files now and having them easily accessible will help streamline the process of getting a small-business loan.

Depending on the lender, you’ll need to submit a combination of the following:

  • Tax returns.
  • Bank statements.
  • Financial statements.
  • Business legal documents
  • Business plan.

5. Apply for a business loan

Start by looking at two or three similar options based on loan terms and annual percentage rate, or APR. Because APR includes all loan fees in addition to the interest rate, it’s the best way to understand the total cost of a business loan for the year.

Of the loans you qualify for, choose the one with the lowest APR (as long as you’re able to handle the loan’s regular payments), and apply with the documents you’ve gathered.

Where To Find Business Loans?

OVX India is one of India’s Largest Upcoming Online Marketplace which you can access from anywhere in India. Just Log on to OVX Inda & search for Business Loan after providing a location. The page takes you to a place where a list of organizations/banks offer their Loan services.

If you liked this article, check out our post – 5 Tips For Taking a Home Loan in India

 

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