Everything that contributes towards growth of a business needs some sort of investment. For long term success, every business needs a quick and reliable source of short term working capital. This is especially true for small and medium enterprises, otherwise known as SMEs. There are numerous ways an SME can avail a risk-free business loan, but the process can be cumbersome in most cases. Let’s look.
If you are an SME looking for a risk-free small business loan, the first thing on your list will be finding a financier. Since all SMEs are not the same, the loans they require are also different. Here are a few pre-conditions on which loans are given to SMEs,
- The interest rate is generally set above 15%
- A loan processing fee is also applicable, although the percentage or amount may vary from financier to financier
- And lastly there may be several checks and balances set by the financiers to ensure transparency in transaction
Make sure you are ready to meet these requirements before applying for a small business loan.
Once you have decided upon a financier, it is time to set your application in motion. For that you must submit the relevant documents to the bank or NBFC you have selected for your loan approval. Business owners are generally required to submit the following documents when applying for an SME loan.
- VAT registration is a pre-requisite for applying
- A copy of your bank statement (the duration of which maybe from 6 months to a year, depending on financier’s policies)
- Trading history of your company can also be requested by certain loan providers
- Incorporation documents and proof of address are also generally required for getting an SME loan
- If you are applying for a large sum, the financier may ask for some collateral
Once all documentation is complete you move on to the next step.
Since you are availing the loan to enhance your business activities, a customized loan according to your requirements will be considered by the SME. These loans can be broadly summed up under three categories.
- Day to Day Working Capital, where you require small amounts of short term loans to ensure smooth business operations
- To expand facilities and services, where you require a loan as an investment in new technology, product launch or any other such expansion of business
- For Marketing and other costs, where the capital is required to spread awareness of your brand through marketing activities.
Each of these customized loan packages for your SME may entail different terms and conditions.
This is the verification phase, where the bank or NBFC will initiate background checks and credit health of your business. Depending upon their credit rating of your business, the finance firm will then offer a loan and repayment roadmap to you. The amount of loan on offer may be equal to or less than the amount you applied for, based on your credit scores and outstanding liabilities.
Once you accept the terms, the loan amount will be sanctioned and you will receive the amount in your bank account.The whole process for getting a business loan for SMEs can take up to 10 days in India.
Now what happens when you apply for a risk-free Small Business Loan with LendingKart?
Apply Online on LendingKart website
The process of applying for business loans with LendingKart is completely online, you register on the website and submit the following documents,
- Bank account statement for one year till date of application
- Proof of incorporation
- Income tax returns if the annual revenue of your company is above 1 crore Indian rupees
Once the application is submitted, LendingKart will evaluate your documents and offer a customized business loan with interest rate as low as 1.25% per month (given your credit score and loan type).
Get Your Loan
Simply get the amount in your bank account, LendingKart takes maximum 3 business days for disbursal of loans after verification of your documents.That’s all…
If wish to Avail Risk-free Small Business Loans, visit the LendingKart web portal today and apply online in a few easy steps.