SOME BUSINESS LOAN REQUIREMENTS YOU SHOULD KNOW ABOUT

For growing businesses, having additional cash flow can be imperative. Without additional cash flow, you might find yourself being unable to afford payroll and other necessary costs. For that reason many business owners apply for a business loan. There are many specific loan requirements that you’ll need to meet in order to qualify. In this article, ShubhBank detail some "Business Loan Requirements" you  should know about what a lender will expect from a loan applicant.

1. Loan Purpose: Most of the lenders want to know why you availing a business loan and how you plan to spend it. The lender views the usage of loan for expanding a profitable business as an effective way to earn interest income. The approved reasons for applying for business loan includes improving cash flow, purchasing equipment, and financing an expansion project etc.


2. Experience in Business: While reviewing your loan application, lender will consider how much experience you have in business. If you’ve owned your business for long years, and have managed it in a financially-responsible manner, this will be a favour for you.A lender will be more likely to approve your loan application if they think you are a skilled business owner and continue to have success after you’ve received your loan.


3. Business Plan: Before applying a loan you might be asked to submit your business plan. This business plan can help a lender to determine the loan amount and term to provide your business with. Make sure that it precisely reflects your business’s financial situation, future goals, and other relevant information.


4. Credit Score: Alender will want to see your personal and business credit score while considering your business for a loan. Before "Applying a Business Loan"  you should be aware of both scores. You can obtain a personal credit report from our online tool, check your credit score for free to determine your credit strengths and weaknesses.


5. Personal Information: Some of your personal information would be required to qualify for a business loan as you are going to use the loan money for your business. As we have  mentioned in the above section, your credit score will affect your eligibility criteria. In addition to that lender usually requests the following personal information in your application like address, academic documents, tax returns of previous years, financial statements, assets etc.


6. Financial Statements of existing Business: You’ll also need to submit your business’s financial statements along with your personal financial statements. The lender will require your business’s balance sheet, profit and loss statements, cash flow statements, income statements etc. Once submitted the documents, the lender will analyse them to determine whether you are a strong loan borrower.


7. Flow of Cash: The primary financial concern for lender is that how does your business generate enough cash flow to repay a loan quantum on-time? To determine this, the lender will ask you to submit report of your primary business cash sources. We understand that managing cash flow is the biggest challenges that business owners face to operate their unit.


These are the requirements you must present to receive approval for a business loan from ShubhBank. So with careful planning and keen foresight, your growing business should be able to implement the effective strategies that lead to the financing of your operation.