If you are looking to meet some financial requirements for your business, applying for a small business loan is the right option. The needs can be buying equipment, expanding the office, to employ additional staff, etc.
Business loans can help during an immediate or increase in demand or at the time of some cash crunch. But, before being considered eligible for one, you may need to answer a few important questions!
Here’s the information that an NBFC would need from you!
The business turnover
Every NBFC will firstly check your business turnover ( how quickly a business can collect cash or the value of sales made during a period). To be eligible for a small business loan, the minimum turnover of your business should be in between Rs.15 lakhs to Rs. 1 Crore.
Age of the applicant
The applicant should not be younger than 21 years (when applying for a loan) and older than 65 years (at the time of maturity or the final payment date of the loan).
Age of the business
The number of years business has been active is also one of the criteria. The minimum number will depend from institution to institution but is mostly minimum three years. Some like Gromor offer loans to businesses who are just a year old.
The credit score
An important criterion is the credit score or CIBIL score. Every applicant’s credit score is evaluated thoroughly for eligibility. Some NBFCs have their credit evaluation methodologies. A bad credit score is not a good sign for obtaining a business loan.
When applying for a business loan, one should make sure that the documentation is in place.
The documents include:
- Aadhar & PAN Card details of the proprietor.
- Last 12 months bank statements
- Balance sheets and P&L
- Income Tax Returns of the previous two years
- The required clearances
- Compliance and licenses required to conduct the business
- GST registration details and receipt.
An important thing to remember in this whole process is the repayment. If you have taken an unsecured loan and you are not able to repay on time, you will have to pay a huge penalty.
Interested in getting an unsecured loan? Get in touch with Gromor, for loans up to Rs. 10 Lakhs, through a simple online application process! If everything is in place, you could get one in 3 days or less…