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HOW TO GET A QUICK BUSINESS LOAN IN 2020?
Business loans are made for the financial benefit of businesses. They are meant to provide extra capital in cases of emergencies, to stabilise cash flow, fill up for delayed income and so on. Banks and Non-Banking Financial Companies (NBFCs) provide several types of business loans that can be availed according to the requirement.
Financial organisations have, in recent times, created methods to expedite the process of application, approval and disbursement of business loans. These are Quick Business Loans. They are especially attractive and beneficial to Micro, Small and Medium Enterprise businesses. These are loans that can often be processed online and have limited procedural stages. They aim to help the growth of small businesses by providing money whenever required at low-interest rates. The loans help in funding emergencies which can prove to be a setback for any company and especially the micro and small businesses unless handled well.
Conditions of eligibility for Quick Business Loans
- The applicant for the business loan should be at least 21 years of age.
- The minimum age of a business needs to be 6 months. For certain loans, the age of the business needs to be at least a year.
- The yearly turnover of business needs to be at least Rs 24 lakhs. Sometimes, financial companies also have criteria based on quarterly turnovers. Other financial records can also be asked for, depending on the terms and conditions of the lending company.
Documents required for Quick Business Loans
- KYC details like Aadhaar and PAN card of the business owner(s).
- Address proof of the applicant
- Address proof of the business
- Registration paperwork for the business
- Bank details of the business for the past 6 months
- Credit history of the applicant
- Credit history of the business and loan repayment history if loans had been availed in the past.
Process of application
The application process for a quick and easy business loan is usually online. For some financial companies, the process may even be through a mobile application. The approval process also takes a few minutes. FinTech companies are front runners in offering flexible and quick access business loans especially to small businesses who may not be able to afford lengthy loan procedures.
Some financial companies appoint a representative to carry forward the loan processes after the initial application. The representative schedules meetings to collect all necessary documents and get the approval completed. If the assistant or representative is virtual, the photocopies of necessary documents are to be emailed or uploaded to the loan portal. The duty of the representative ends with the disbursed monetary amount reaching the bank account of the business or that of the applicant.
The main reason why these loans are deemed as Quick Business Loans is due to the lack of paperwork. They condense multi-paged loan applications to a few clicks on a screen.
Characteristics of Quick Business Loans
- Most of the types of business loans are available through online procedures, making them quick and easy to avail.
- Amount on these loans can go up to Rs 10 lakhs.
- These loans usually have a processing fee
- Time taken for disbursement is maximum a week.
- Quick business loans are unsecured and do not require collateral. The credit score of both the applicant and the business is the asset the financial companies check before approving the loan.
- Tenure on these loans are short and can be anywhere between 3 months to 3 years.
- Interest rate is low but is subject to modifications depending on terms and conditions. However, the rate of interest remains fixed for the tenure of the loan. The fixed-rate protects the business from fluctuating market rates.
Benefits of Quick Business Loans
- Useful in managing a seasonal increase in budget requirements
- Purchase of new machinery or equipment
- Stabilising cash flow in situations of payment issues from clients, especially in MSMEs.
- These easy business loans can help smaller businesses to expand by renting or buying property.
- Purchase of bulk raw materials at a time when the cost of purchase would be low. This investment would benefit the profit margin later on and enable the business to easily pay the loan back.
What are the points to consider while availing these loans?
- As an applicant, check the credit history of your business and your personal credit history. These factors will be considered by the financial institution that will be granting the loan.
- If the loan application is through an online process, there is the facility for checking loan eligibility and possible EMI that would be needed to be paid back by an EMI calculator. These can assist with checking whether the requirements of the lender and borrower match before application. If not, other lenders can be sought.
- Keep all necessary documents ready and up to date. Although quick and easy, similar to traditional loan approval processes, all documents are checked. Photocopies of all documents are usually asked for and then verified from government sources.
- The most important factor is the proper assessment of the need for a loan and the type of loan. Ensure the requirement of the loan is solid. Also, ensure that paying back the loan instalments will not become a hindrance. Choice of loan is also necessary to meet the specific demands of a business.
In conclusion, quick and easy business loans are technically just a few clicks away. The process is easy and requires basic familiarity with technology. But even though the process of acquiring the loan is easy, all other conditions remain the same. Consider all necessary factors that will be beneficial to a business before applying for a loan.
Also Read: All about Doctor Loan in India
Quick Business loans have been incredibly beneficial for the smaller businesses in our country, allowing them quick access to money for proper functioning. FinTech companies have revolutionised the space by making the loan process very user-friendly.
Allow your company the money it needs quickly by completing a loan process in a few clicks.