{"id":242,"date":"2020-06-06T05:58:36","date_gmt":"2020-06-06T05:58:36","guid":{"rendered":"https:\/\/www.loanfasttrack.com\/blog\/?p=242"},"modified":"2020-06-10T16:39:26","modified_gmt":"2020-06-10T16:39:26","slug":"what-to-apply-for-a-business-loan-here-is-everything-you-should-know","status":"publish","type":"post","link":"https:\/\/www.loanfasttrack.com\/blog\/blog\/finance\/what-to-apply-for-a-business-loan-here-is-everything-you-should-know\/","title":{"rendered":"Want To Apply For A Business Loan? Here Is Everything You Should Know"},"content":{"rendered":"\n
\"Business<\/figure>\n\n\n\n

Money\nis all pervading the driving force for any business organizations. Right from\nstarting a new business or expanding the existing one, money has all the\nimportant roles to play.  Money for the business can be raised either\nthrough personal funds i.e. through savings & investments or simply by\nopting for a fresh business loan. Alternately the Initial investments required\nfor the start-ups businesses can also be raised by finding suitable investors\nto invest in the start-ups. <\/p>\n\n\n\n

An existing business looking for future expansion and acquisition can approach its relationship bank to raise the required funds via business loans. There are multiple lender banks and NBFCs who offer such business loans. However the loan applicant is required to fulfil the lender conditions before applying for business loans<\/a><\/strong>, which are:<\/p>\n\n\n\n

  1. The loan applicant must be self-employed with any type of company whether proprietorship, partnership, private limited or public limited. <\/strong>
    <\/li>
  2. The loan applicant must have a CIBIL credit score of 750 and above. (A CIBIL gives an entire track record of the applicant\u2019s existing loans & the past loans.) <\/strong>
    <\/li>
  3. The loan applicant must have an active current account and all business transactions must route through this current account. For the small businesses that trades on cash must maintain a proper detailed cash ledger registers.<\/strong>
    <\/li>
  4. The applicant is required to maintain proper business transactions, average balances and savings in his banking account. This determines the EMI paying capacity of the applicant.  <\/strong>
    <\/li>
  5. The applicant must maintain proper books of accounts – gross turnover, net profit, also the business contracts, business projections and cash folio ledgers. This determines the business loan eligibility. <\/strong>
    <\/li>
  6. For the loan applicants with higher obligations, in order to qualify for a business loan, seek an expert (on <\/strong>https:\/\/www.loanfasttrack.com\/<\/strong><\/a>) to consolidate the existing multiple short term loans into a single secured loan. The higher obligation hampers the loan eligibility, consolidating to one will help reduce the EMI and qualify for maximum loan eligibility.<\/strong>
    <\/li>
  7. Business stability required – minimum 5 years of business continuity is mandatory.<\/strong><\/li><\/ol>\n\n\n\n

    Types of Business Loans <\/strong><\/h3>\n\n\n\n

    There\nare different types of business loans and each loan type comes with its own set\nof terms and conditions. Carefully consider the type of the loan that best\nsuits the requirement, by analyzing the facts such as what & why the\nbusiness needs the loan for, repayment terms that can be handled and\nimportantly how much loan is required. Business loans are mainly categorized as\neither short term loans & long term loans OR secured loans & unsecured\nloans. A secured business loan is the loan taken for business by providing\nassets, fixed deposits, gold, shares, bonds, etc as collateral for taking the\nloan while the loan which is not secured i.e. which does not involve collateral\nis termed as unsecured business loans. <\/p>\n\n\n\n

    Apart\nfrom the categorization of secured and unsecured loans, business loan itself is\nof various types such as, equipment loan, term loan, overdraft, working\ncapital, bank line of credit, business credit card, etc. However it can be\nbroadly categorized into two types:<\/p>\n\n\n\n

    1- Professional Loans<\/strong><\/h4>\n\n\n\n

    2- Trade Loans<\/strong><\/h4>\n\n\n\n

    Both\ncan either be short term or long term and or secured or unsecured in nature\ndepending upon the terms and conditions of the lenders.<\/p>\n\n\n\n

    1- Professional Loans <\/strong>–<\/strong>\nBusiness loans given to professionals such as lawyers, doctors, architects,\nchartered accountants, etc. are termed as professional loans. These loans are usually long term in nature and have\npayback tenure of about 5-7 years.<\/p>\n\n\n\n

    Documents Required For Professional Loan Approval:-<\/strong><\/h3>\n\n\n\n