Do you think you need capital for your small or medium sized enterprise? Are you planning to apply for a business loan in India? You must be busy searching for the ideal mortgage then. However, it’s only when you are familiar with the requirements of a lender, can you qualify for the right loan!
It often happens that in order to expand their business, owners avail finances from various institutions. Be it a loan through a bank or an online small business loan, each lender has pre-requisites of its own which you need to fulfil. Ensuring that you meet the specific criteria before applying will save you from time as well as frustration. Qualifying for the right small business loan is easier when you are prepared from before!
Scroll down to check our to-do list which will help you to be eligible for the cash you require!
5 Steps To Qualify For Mortgage SME Business Finance In India
1. Know the minimum requirements and qualifications of the lender
It is only when you fulfil the lender’s requirements can you be a strong applicant. It’s true that there are few lenders who offer exemptions like if you are over-performing in one area, it can be adjusted for the area you are under-performing. However, it’s better if you meet and exceed each of his desired qualifications.
2. Build credit scores- both personal and business
The higher is your personal credit score, better is your chance of being selected. This is chiefly based on 5 determinants like- your payment history, debts and the amount owed on credit cards, types of credits you are using, duration of your credit and latest credit inquiries. Business credit scores depend on factors like- cash flow, revenues, track record and duration in the business.
3. Create a solid business plan
Before applying for mortgage SME business finance in India, it is essential that you build a strong business plan first. Any lender will want to know how you are planning to use his money. He will want to see if you have the capability to repay. Sometimes they require a detailed plan which must include-
- Business description
- Service/product description
- Operation plan
- Management team
- Marketing, sales and promotion strategy
- SWOT analysis
4. Gather the essential documents
Be it a traditional lender or a bank, you are supposed to submit several legal and financial documents. These include-
- Business lease
- Commercial lease
- Photo of your identity
- Income tax returns- both personal and business
- Bank statements- both personal and business
- Documents which validate your experience
5. Offer collateral
You may have to provide some collateral; an asset which can be seized in case you fail to repay the money. This can be a real estate inventory or equipment through which the lender will recover his money.
So what are you still waiting for? Look for the best mortgage and start preparing yourself according to the lender’s requirements!