Starting up and running a company requires significant capital. This is where a business loan comes in – as it can help finance a business's establishment, expansion, and other key expenses. However, obtaining a business loan is easy if you meet the eligibility parameter. These factors include creditworthiness, the ability to repay, and the nature of the business. In this article, we list some ways that can improve your eligibility for a business loan.
Factors to improve eligibility for a business loan
1. Maintain a good credit score
A credit score determines your creditworthiness, which is an essential factor for business loan approval. A high credit score boosts the likelihood of loan acceptance and attractive business loan interest rates. With a credit score of 685 or more you can get a business loan of up to Rs. 80 lakh with Bajaj Finance. If your credit score is low or needs to be raised, focus on paying off credit card balances, EMIs, and any outstanding debts.
2. Show financial stability
Your financial records are examined to determine how stable your business is. A constant and growing customer base, as well as a track record of paying taxes on time, all indicate financial stability. A stable financial history showcases your ability to handle loan obligations, boosting your credibility and increasing your chances of qualifying for a business loan with favourable terms.
3. Have all the documents in place
Gather business financials, tax returns, legal agreements, and other relevant records. A well-organized documentation portfolio enhances your credibility, expedites the approval process, and demonstrates your commitment to transparency and professionalism.
Obtaining a business loan requires thorough planning. Having a well-thought-out plan and a solid credit score will boost your chances of approval. Positive characteristics such as financial stability will also work in your favour.
Do your research to find loan terms and business loan interest rates that work for you and stay focused on building a successful and profitable business venture. Bajaj Finserv provides business loans up to Rs. 80 lakh.
4. Business vintage
How long your business has been operating plays an important role in the approval of business loan. A longer operational history showcases stability and success, boosting your credibility as a borrower. Demonstrating consistent growth over time can improve your eligibility, signalling that your business is a reliable investment. With a business vintage of 3 years you can get a business loan of up to Rs. 80 lakh with Bajaj Finance.
