Finance act as an indispensable factor in business. A business loan maintains the stability of a business. Finance is needed for the acquisition of assets, to restructure debts, to fuel working capital, or funding a new marketing strategy. But how would a company apply for a business loan? Let us look at the 5 essential steps to get a business loan for a company.
- Consider Your Needs
In the beginning, you should know why do you require taking the loan? Let us take a look at the various reasons for taking the loan
It can be taken for the initial investment in the business. To expand the business opportunity in the beginning or even to outgrow your business when you have already started it, you need funds. This fund can be used in the advertisement for the company, purchase of new property, or renovation of the old building. An extra flow of cash in hand is required to keep the business remain steady.
An easy business loan can also be taken for increasing the inventory or stock. You need a good amount of stock to impress your customers. You should continue to buy and update your inventory according to the demands of the customers otherwise it becomes difficult to sustain in the market.
For purchasing new and improved machinery too, business loans can be taken. Now machinery has its warranty period and depreciates which again needs repairing and hence incurs expenses.
A large amount of loan is required for reinvestment in the business. If your business is small but you are earning potential revenue, it is likely to invest more in the business.
A working capital loan can be taken for meeting the day to day expenses of the business.
- Find Out the Most Suitable Loan that Meets Your Needs
When your needs are clear, the next step is to choose the right type of loan for your business. There are around 7 types of business loans. For choosing the right type of loan for your business, you need to consider some basic things like
- The terms and conditions of the loan.
- The repayment terms of the loan.
- The amount of loan that you require.
An easy business loan is the most popular form of loan by small business merchants. Such loans are easy to obtain and enable you to make a large purchase plan.
- Ascertain the Right Source for Your Business Finance
This is a vital step in business financing. With technology at its peak of advancement, you have access to a large number of potential investors. However, one has to do proper investigation before considering the investment model and verify the validity and legality of such sources of finance. While selecting the source for your business funding, you need to consider these basic things:
- The cost of finance
- The risk associated with the finance
- The dilution of control
- The flexibility and schemes of repayment
- Ask Yourself Whether You are Prepared
When you are ready to apply for a business loan, you should be confident about these points
- You have been into the business for a long time and you know your business is generating enough revenue to refund the loan amount.
- You have ascertained the purpose of taking the easy business loan.
- You know exactly how much is required for funding your business.
- You have agreed upon the terms and conditions and hence know approximately when you can repay the amount to your lender.
- You are ready for the security deposit which can be anything between annual business revenue to a considerable percentage of business shares.
Learn about all the funding options available.
- Sort Out Your Credentials
By now you have successfully compared all your potential options and have decided on the most suitable source of funding. Hence, it’s time for the company to apply for the loan. You have to set the following documents to apply for the loan
ü PAN card/Driving License/Passport/Voter’s ID/Aadhaar Card as your identity proof
ü Passport/Driving License/Passport/Voter’s ID/Aadhaar Card/Utility Bill/Bank Statement/Bank Account Passbook (New and Updated) as an address proof
ü Electricity Bill/Maintenance Bill with share certificate, etc as a proof of the company’s ownership
ü Shop and Establishment Certificate/Tax registrations-VAT/Service Tax/GST registrations.
ü MOA/Partnership Deed/GST Registration Certificate as Firm Constitution
Now there are variations of requirements related to documents among the lenders. However, you should be ready with the above-mentioned documents to avoid unnecessary delays in getting the loan.
Also, before you apply for the loan, you should know about all the loan interest available, choose your desired interest rate and calculate it to know the EMIs and the tenure of repayment.
Why Should You Apply for Capitall Finance?
At Capitall Finance, you have access to unlimited business schemes at your fingertips. Your application gets processed at a lightning speed and the loan amount is deposited on the next business day. You have a hassle-free experience of paperwork and the repayment options are tailor-made and flexible. Also, there are no hidden costs to shock you as the company maintains transparency in the fee structure.
Take a look at the features of Capitall.com and take the next best step towards the growth and success of your company.
