How to Improve Your Odds Of Procuring A Business Loan

Decide how much you need

You need to have an idea of the amount you require to meet your goals. While overestimating would lead to higher cash outgo every month, underestimating would defeat the purpose of the loan. It is, therefore, important to have a well-thought-out budget supported by financial projections and numbers to your lender to show that you’ve done your research and know the amount of money you need.

Improve your credit score

Your credit score indicates your money management skills. It tells the lender about your creditworthiness. Hence, having a good credit score is extremely important to get approved for a loan. Paying your bills, EMIs, and any other liabilities on time improves your credit score. Additionally, opening multiple credit accounts and maintaining your credit utilisation ratio at around 25% with all of them would be ideal as well.

Research on lenders

It is essential for you to research on the potential lenders before procuring a business loan. With the emergence of non-banking finance companies (NBFCs), the lending landscape has undergone a sea change. Some of the leading NBFCs are offering flexi business loans where you can borrow the amount as and when required from your pre-approved loan limit. It’s crucial to compare the offerings from various lenders before making the final decision.
Lastly, remember that proper planning will save you a lot of time and effort, when it comes to procuring financing. So, research well and be prepared before applying for a business loan.