Are you looking for a loan for your new venture?
Now, consider this: You have already had a discussion with a couple of banks, and both are being sceptical!
If you have answered ‘yes’ to the above, then you are in the right place.
When it comes to an SME Loan, banks impose tough terms and conditions for the applicant owing to the threat of the loan becoming an NPA. Being in such a situation may hamper your self-confidence.
However, there are other options too! Opt for such a loan from NBFCs who welcome SME owners with open arms. They don’t impose stringent rules while customers apply for loans; they offer Flexi Business loans which enable you to borrow any amount as per requirement and repay only the interest amount as EMI.
Already seems interesting?
In addition, their most significant benefit – no collateral!
Now, to obtain a collateral free business loan, you have to satisfy some basic requirements of an NBFC.
1. A Satisfactory CIBIL Score
With a CIBIL score that reflects your faithful repayment history, you will be able to receive a business loan easily. Make sure your credit score is above 750 and NBFCs would graciously grant you such a loan.
Reality check: To secure a high credit score, check it regularly, ensure you don’t keep ample credit, pay them timely, don’t take too many loans, and don’t apply for too many loans simultaneously.
2. Develop a Good Business Plan
For making sure the NBFCs provide you with an Sme Loan, develop a strategic and profitable business plan. This plan would include your business model that would project your expenditure, revenue, sales, and profit.
Not only that, but you also need to forecast a satisfactory ROI.
Return-On-Investment (ROI) is a key factor in convincing the lenders. Lenders will decide whether your business plan is plausible in the current market and whether your venture returns will suffice to repay your loan amount within time.
3. Develop a Strong Pitch
Every aspect of our daily life requires us to represent ourselves in a decent, engaging way. Applying for a loan is no different!
To explain your business plan efficiently to the lending organisation, you need a strong pitch. Just developing a strategic business plan will not work.
- Create a proper business portfolio.
- Explain your ideas properly.
- Describe your mode of operation.
- Project monthly and yearly profitability.
- Mention hick-ups, if any and their solutions.
These factors will address almost every query that the lender will be sceptical about.
The X-factor?
Have a Plan B while projecting profitability, in case Plan A fails!
That’s about it! Present your full-proof business plan with a strong pitch and your job is done.
4. Ensure your Other Businesses have Credibility
If you have other ventures or you are a partner of one, make sure they have credibility. Meaning, the old ventures have showcased regular profits and have good market reputation.
Furthermore, tick the below checklist:
- Filed income tax returns regularly.
- Audited balance sheet and Profit and Loss Statement.
- Business vintage of more than 3 years.
With an already established sound business, your chances of getting an SME loan can increase considerably.
5. Get your Business Registered
Before going for your loan pitch, get your business registered.
How do I do that?
Approaching a local government body for registering your business would be a good way to start. This will ensure that your registered business has all the permits and licenses necessary for obtaining a loan.
You can also visit the lender’s website and know the eligibility criteria and prepare every required document! Factors mentioned above will ensure your eligibility to get an SME loan for your new business or start-up. NBFCs like Bajaj Finserv make the process simpler and less complicated.
This post first appeared on Informative Website | E-Biz Insider, please read the originial post: here
