Need Mortgage SME Business Finance In India? Know How To Qualify!

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!

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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!


Applying For Mortgage SME Business Finance in India? 5 Questions To Ask

Are you willing to buy a commercial premise? Extend your existing business property? Or simply invest in some commercial project? Then, applying for a mortgage SME Business Finance is a wise thing to do. Commercial mortgages generally have a lower rate of interest as compared to the other business loans.


You can extend the loan period for a number of years and repay the money when it is most suitable for you. Since, the loan has so much to offer, applying for mortgage finance is indeed a cool decision for every small or medium sized enterprise owner. But make sure to ask your lender few questions before submitting the applications.

Few Questions To Ask Your Lender Offering Mortgage SME Business Finance in India

  • What Is The Interest Rate?

    Just asking about the rate of interest isn’t enough. Ask your lender about the loan estimate which includes his fees, interest rates, and the APR (annual percentage rate). This APR consists of the points, fees, interest rate, or any other charge you have to pay for the loan.

  • How Much Will You Charge As The Closing Costs?

    You will have to pay a certain amount at closing as a charge for the services offered by your lender or for any other party involved, like the title companies. Make sure your lender provides you with a written estimate clearly stating the closing costs after receiving your application. The maximum time they should be requiring to prepare this estimate is 3 days.

  • Can I Lock The Interest Rate?

    Before applying for the mortgage, ask your lender when can you lock the interest rate and how much do you have to pay for it. Locking the interest rate is vital since it might fluctuate from the time you have applied for the loan and the closing date. If you can predict that the interest rate will hike, it is advisable to lock it and the points.


  • Is There A Chance For My Loan Approval To Get Delayed?

    There are various reasons for which a loan approval generally gets delayed like job change, change in your marital status, new debt, increasing or decreasing salary, or fluctuations in your credit history. The best is to place your financial status in a dormant pattern till the closing table is reached.

  • Do You Charge Any Prepayment Penalty?

    Some financial institutions offering Mortgage SME Business Finance in India charge an amount as penalty for mortgage repayment. So if you are planning to reduce or refinance your principal amount within the next few years, make sure to ask about the prepayment penalty. Enquire about the penalty specifications and whether the lender will lower the interest rate if you opt for a loan with a penalty.

With so many companies Mortgage SME Business Finance all over India, make sure to compare the services offered by each. Doing so will definitely help you choose the ideal SME mortgage provider.