Every small business owner might require funds for the business to meet various financial requirements of the business and to achieve the business objective.
There are various options available for a very small business loan to avail a loan. Lenders like banks, NBFCs, and other such financial institutions, angel investors, venture capitalists, also via some schemes introduced by the government.
Difference between an NBFC and a bank:
When you approach a bank for the loan, you will have to visit the bank branch, write a loan request letter to the bank manager, fill the details in the form, submit a huge list of documents, and then wait for loan disbursal which takes a long time. It also requires multiple bank visits (after application, to submit the documents, to get the loan amount)
NBFCs dont require the business owner to visit the office again and again to complete the loan formalities. Only the website of the lender has to be visited and the loan application has to be filled along with uploading the documents. After this, the borrower only has to wait for loan approval and loan amount disbursal.
Issues with a bank loan:
In case of banks, some of the issues the applicants can face are related to the security that they ask to take the loan, which is not feasible for small businesses especially startups which are just a year old. And if the security is given to the bank, if there is any delay or default in the payment, the bank can seize the asset given as security and sell it to obtain the loan amount. Another issue with a bank loan is that the small business owner needs to visit the bank a few times which is time-consuming and affects the business tasks. Apart from this, the other terms and conditions of the bank also have to be fulfilled.
Nowadays online lenders are also there in the market who provide online loans to businesses, there is no need to visit the office to apply. They are catching up with small business owners because it is very systematic, loan disbursal is faster, and saves time.
NBFCs accept online applications but they have their own eligibility criteria for granting the loan.
Here is what an NBFC asks every small business owner to grant the loan:
1. Age of the applicant
The age of the applicant which is considered at the time of loan application is 21 years, and the age considered at the time of final payment of the loan is 65 years.
2. Turnover of the business
Business turnover refers to the value of sales made during a period (that financial year). Lenders consider this as one of the criteria to provide loans. The value of the turnover a lender requires should be between Rs. 15 lakhs to Rs. 1 crore.
3. The activity of the business
The activity of the business or the number of years a business has been operating also plays an important role. Most of the owners consider the business which has been active for 3 years or more but it completely depends on the lender. Many of the NBFCs also consider businesses which are just a year old.
4. Credit score
Credit score or CIBIL score is another important criterion to provide a loan to a small business owner. A credit score between 750-900 is considered good to get a loan. But every NBFC can have its own credit score criteria. Some NBFCs also have their own credit evaluation system. Maintaining a good credit score will increase the chances of getting a loan.
5. Documents required for the loan
Few of the documents considered by NBFCs are PAN card, Aadhaar card, ITR of the previous two years, latest balance sheets, bank statements of all accounts of the last 12 months in pdf format, and GST registration details.
Benefits of taking a loan form an NBFC online:
- Saves time (no need to visit the lender again and again)
- Minimal documentation required
- Can apply form anywhere (home or office)
- There is no security involved
- The loan disbursal is much quicker (a few days)
But before you visit a business loan website to apply for a loan, it is important that you check the lender thoroughly by visiting the social media pages of the company and reading the reviews of the other business owners. Reading the reviews and also how the company responds to the queries and complaints if any on the website and social media.
Here is what you should consider before going for an online loan:
- Assess the requirements of the business. The loan is required for expansion, to buy new machinery, etc.
- Know the status of your credits.
- Make sure that all the business financials are up to date.
- Keep all the documents handy
- And lastly, do research on the lenders in the market.
One of the NBFCs who provide unsecured loans to small businesses is Gromor Finance. Gromor Finance offers a secure way to apply for a loan. Gromor also has its own business loan eligibility and EMI calculator to help the applicant in knowing whether he/she is eligible for the loan or not and the idea about how much monthly EMI has to be paid for the loan.
Here is the application process for Gromor Finance:
- Visit the website https://gromor.in and fill the application form.
- Upload the required documents online. The verification process of the documents is confidential.
- Wait for loan approval. The automated process makes loan approvals faster.
- When the application is approved, the loan amount is disbursed within 3 days or less.
By applying for a loan at Gromor Finance, you can be sure that the process from start to end is all done systematically, and is safe. With faster loan disbursal, small businesses can meet their financial needs instantly.
If you want to apply online for a business loan, you can easily do it by visiting the website of Gromor Finance and follow the steps mentioned. With Gromor Finance, you will be able to take a quick and unsecured loan for your business!