Small business owners might require business loans to run the business efficiently. When you take the next step of applying for a loan, you might come across some business loan myths.
Here are some small business loan myths which should not be taken seriously:
1. It is a long process
Increasing digitization has made it possible to apply for loans online along with uploading the required documents. Due to this availing loans has become a faster process. The lender processes the application within just a few hours or within 2-3 days and the disbursal is also in just a couple of days or less.
2. CIBIL score is the only important eligibility criterion
Although CIBIL score is important and helps the applicant in getting a loan at the best possible interest rates, other factors should be considered as well.
Banks give a lot of importance to the CIBIL score. But some other institutions like an NBFC and online lenders consider other factors also like the Business plan, Financial situation of the business, the P&L account, cash flow etc.
Some lenders also have their own credit evaluation system which increases the chances of getting a loan application approved faster.
3. Giving something as security is compulsory
Small businesses mostly cannot offer any security, because of which they face rejection most of the times. This makes them feel they cannot get any loan.
But there are many lenders in India that offer unsecured loans as well.
4. Online lenders cannot be trusted
Most of the small business owners think that approaching online lenders can be risky. But online lenders are completely safe all you need to do is to carry out proper research on the online lenders and choose one that is registered with the RBI.
5. Loans of a small amount cannot be availed
Most of the small business owners think that they won’t get loans of small amounts but they can be availed between 1-5 lakhs and many lenders provide small loans also. You just have to take care of the documentation and should have a proper business plan.
6. An interest rate is the most important factor
Interest rates are important for a business loan but not the only factor. There are other costs involved as well, like the processing fee, foreclosure penalties, etc. Therefore, all these factors also need to be taken into account by the small business owner. Help from a professional can also be taken for better understanding.
7. There is no option left after a loan gets rejected by the bank
Most of the owners think that only traditional lenders like a bank are best and if their loan application gets rejected by a bank they feel that there is no other option to avail a small business loan.
But there are lenders like an NBFC which provide loans to small businesses irrespective.
Planning to contact a lender for a small business loan? Get in touch with Gromor Finance for unsecured business loans at attractive interest rates!