Business loans are invaluable tools to help firms develop and expand.
Numerous elements influence the procedure for Business Loan applications. One crucial component in assessing whether or not an applicant business will qualify for a Business Loan is their age.
The decision to approve or deny a Business Loan will also consider the applicant business’ revenue. Low wages will make it more difficult for an online Business Loan approval. Borrower businesses with a positive cash flow can return their debts on schedule and without experiencing financial troubles.
Applicant businesses that have a poor credit history will have difficulty getting Business Loans. Before approving a loan, lenders will also consider the borrower’s business type and business strategy.
Businesses are not shying away from taking Business Loans to innovate, expand and enhance their operations. Data from the Reserve Bank of India (RBI) revealed that in June 2022, business credit usage in India increased by 9.5%. Credit growth for micro and small businesses increased to 29.6% from 11.6% a year prior.
Quick Business Loans are popular due to the convenience offered. They are essential tools to finance both short and long-term projects. Businesses can get these loans easily in no time when they meet the eligibility criteria. Some key criteria include profitability, risk management, ability to repay the loan and overall viability of the business.
What is a Business Loan?
A Business Loan is a financing product that provides funds to businesses. Business loans are used to finance existing businesses, buy equipment, hire employees, expand operations, invest in a property or fund a marketing campaign.
At Clix Capital, Business Loans are customized to meet different financial needs, and loan solutions are flexible, affordable, and hassle-free.
Borrowers can obtain collateral-free Business Loans ranging from Rs. 5 lakhs to Rs. 50 lakhs to take care of the expanding needs of their company, with minimal documentation.
What categories do company loans fall under?
Two categories of Business Loans have been listed below.
- Secured loan
The borrower must pledge an asset as collateral to get the requested funds from a secured loan. The asset will be forfeited if the borrower fails to repay the loan promptly.
- Unsecured loan
Borrowers who take out unsecured loans are not required to give the financial institution any collateral. An unsecured Business Loan is granted based on various criteria, including the applicant’s credit history, financial records, and income.
What are the parameters that affect the Business Loan application?
Below are the factors that will determine whether a borrower will be granted a quick Business Loan or not:
- Age of the borrower
When financing money for any project, one of the prime considerations is the borrower’s age.
If the borrower is young, they may have no track record, so their credit history is unknown. In addition, it becomes difficult to assess their repayment capacity.
Moreover, if the business is new, it may not generate any income, which could be another challenge.
To avail of a quick business loan from Clix Capital, borrowers must be at least 21 when applying for the loan and under 65 years when the loan matures.
- Income of the borrower’s company
A company’s income is one of the most significant factors in a Business Loan application approval. The company’s income helps to determine if it can afford to pay back the loan.
If the income is low, it will be difficult for the borrower to repay the loan fully on time. Thus, the higher the income, the more likely a borrower will get an online Business Loan approval.
To obtain a Business Loan with Clix Capital, a business must have a minimum annual turnover of Rs. 1 crore.
- Cash flow
Cash flow indicates the borrower’s ability to repay their Business Loan payments on time. Lenders consider it an essential parameter when approving a Business Loan application.
Cash flow shows how much money a business will be making from its operations. This helps determine whether or not one will be able to repay the loan.
If there is no reliable source of cash flow, then it will be difficult for a lender to approve the funding request, which may lead to delays in the online Business Loan approval.
- Credit history
Loan providers want to know that borrowers can repay the loans on time without any problems. This is why they check their credit history before granting them a Business Loan.
For individuals to be eligible for a Business Loan, their credit ratings must be high enough. A low credit score might not help them obtain online Business Loan approval. Clix Capital offers Business Loans to businesses with a CMR score of up to 6 and a CIBIL score of 700 & above.
To improve your credit score and chances of getting approved for financing, you must ensure that you keep up with all payments on time and in full so that there are no missed payments or late fees. You can check your credit score free online.
- Business plan and Business type
A key consideration in your Business Loan application is the type of business you have. The pace of online Business Loan approvals may slow down, and interest rates may increase for a business that involves risks.
Borrowers with a strong business strategy typically receive Business Loans with higher loan amounts. A business plan needs to specify in detail things like revenue from prior years, tactics, anticipated sales, and earnings during the next three to five years. These details can help you land an ideal loan offer.
Business Loans are great tools to fuel growth and expansion for businesses. However, make sure to assess the loan products before signing up for a Business Loan. Furthermore, being proactive and prepared with all the information and documents needed helps speed up the Business Loan application process.
Visit Clix Capital’s website today to learn more about Business Loans and explore the loans your business is eligible for.