Business loans are the lifeline for any business if they want to grow and expand. Whether it is a business loan for self-employed or business loans for manufacturers, you can get an MSME loan or a personal loan by providing the necessary documents.
Who is eligible for a shop loan?
You can use a personal loan for any purpose you want including your business. If you are an Indian resident or citizen over the age of 21 years and earning a net income of over Rs 30,000 per month, you can apply for a loan at LoanTap.
What is the process of applying for a shop loan?
The process is very simple. You can visit the LoanTap website and fill in the online application with the required information.
Now upload the basic documents like –
- PAN Card
- Aadhaar Card/Driving Licence/Passport
- Income Tax returns for the last two years
- Bank statements for the last six months
Now sit back and relax. If your documents are in order and your CIBIL score is decent, your loan application will be approved. The cash will be credited to your account within 24-36 hours.
LoanTap provides personal loans from Rs 50,000 to Rs 10,00,000 for tenures ranging from six months to sixty months. Interest rates start at 18%per annum.
LoanTap also provides MSME loans up to Rs 2,50,000 for tenures up to 36 months. You need to be an Indian citizen or resident over the age of 21 years but less than 60 years with a net monthly income of over Rs 30,000.
You can take a machinery loan for your business to upgrade your plant and machinery.
Businesses need funds to manage their cash flow requirements. They need working capital for smooth management of daily operations. It could be for the purchase of machinery, increasing inventory levels, adding a new office etc. A business loan for self-employed would help them resolve this gap.
Manufacturers/ self-employed professionals/ shop owners can take business loans from banks, NBFCs, fintech lenders etc.
What are the benefits of a business loan?
Management of working capital – Business loans can help small businesses manage their working capital requirements without any interruption. During sluggish business phases, a business loan for manufacturers can help business owners manage their operations.
Choice of tenure – Business loans can be taken for varying tenures according to your choice. Business owners can choose long term loans up to 5 years or longer or short term loans that need to be repaid within a year. This gives them the flexibility to fix a convenient EMI that will fit their monthly budget.
Reasonable interest rates – Various banks and NBFCs offer business loans at competitive interest rates. The final interest rate will depend on the eligibility of the borrower, the tenure and the creditworthiness.
Nominal processing fee– If you are a regular customer lenders may choose to waive off processing fees. Else you may need to pay a nominal processing fee.
No prepayment penalty – There is no prepayment penalty if you repay the loan after 6 months.
Flexible repayment options – You can choose a flexible repayment option from the choices available. This will make it easy to pay the monthly EMIs. You can set up an auto-debit facility so that you never delay or default on an EMI.
No collateral – Several lenders like LoanTap offer business loans without asking for any collateral. This makes it very easy for small businesses to get a loan.
Build your credit worthiness – Taking short term business loans and repaying them efficiently is a good way to build business credibility and have an open line of credit for the future.
Business loans can keep your business well oiled with a steady supply of cash to be used as and when needed. Most small businesses would need such support in their growing stages.
What guidelines should you follow before taking a business loan for self-employed?
Like all loans, business loans are also given based on the creditworthiness of the borrower. Certain requirements will have to be met before you get a business loan. What are the points that you should consider before taking a business loan?
Borrow according to your repayment capacity – Never borrow more than you can afford to pay back on a monthly basis. If you take a loan beyond your capacity you may end up with high EMis that could create a liquidity crisis on a monthly basis. Make sure you calculate the EMI before you enter into a loan agreement. A delay or default can upset your calculations.
Compare rates before availing the loan- It is always good to check out all the choices available before going with one lender. Interest rate is a very important factor to be considered. Check out the interest rate offered by all the lenders. Also, compare the processing fees and other hidden charges. Interest rates for business loans can be in the range of 12-21%. Check the eligibility criteria and minimum Credit score required as well. Do your homework before settling on one lender.
Keep the documents ready – While processing an online business loan for manufacturers, it is important to keep all the documents ready. To get a business loan, you will need to submit more documents like the IT Returns, Memorandum of Association and the Articles of Association of the business. It is best to keep these documents handy before starting the application process.
Watch your credit score -The most important aspect that can work in your favour to get your loan application sanctioned is your credit history. Lenders would definitely evaluate your credit history before accepting your loan application. Knowing your repayment capacity is an important consideration for a lender. Your credit score is a numerical summary of your credit history. It indicates how punctual you have been in repaying your previous debts whether it is a loan or a credit card outstanding. It is best to get the CIBIL score check done before applying for the loan. In case of errors in the credit report, you can get them rectified before applying for the loan. Else you run the risk of rejection and you cannot reapply within a short period. Improvement of your credit history takes a lot of time, around six months to a year. If your credit score is below the minimum needed, you may approach an alternate lender who is willing to lend at a higher rate. This will save you time.
Avoid multiple applications – If you apply to many lenders at the same time, too many credit enquiries will go out which will deplete your credit score. You will be seen as desperate for credit and this could go against you.
Have a sound business plan – The lender may ask for a business plan to understand the viability of the purpose for which the loan is taken. This is usually needed when the loan amount is very high. It is best to keep a detailed business plan handy to be submitted to the lender when asked for.
LoanTap understands your need for a business loan. As a business owner or manufacturer, you may have multiple reasons to borrow funds. Whatever be your need, we are available to provide you with smart business loans whenever you need them. All you need to do is visit our website or use our loan app for a seamless customer experience.