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FACTORS AFFECTING THE BUSINESS LOAN

 

Both starting and running a business leads to facing lots of financial pressure, you need to have a good amount of running capital to ensure them running smoothly. However, if your business is doing good and making sufficient money to maintain its capital flow, you are in a good position. But taking your business to that level needs lots of hard work along with the findings.


Running a business needs a lot of planning among which arranging funds is one of the most important things. Business loans can be a great help as they provide funds specifically for your venture. These loans are available with most of the lenders and can be availed easily. But for this, you have to "Apply Online For Business Loan". For getting this loan approved, there are fixed eligibility criteria.

If you fail to match the eligibility criteria, your application gets rejected. But some factors negatively affect "Business Loan Eligibility":-

1.    Age: - Your age is the first thing that a lender will consider when you apply for a business loan. In this case, your age must be between 25 to 60 years. This is an important factor when availing of the loan as it decides your repayment ability.


2.    Documents: - Your business loan approval depends on a few documents. For business loans, you have to provide the Business certificate, business licenses issued by government authorities. If you qualify all this, you will get business loan approval.


3.    Credit History: - Your credit history plays a significant role in the acceptance and rejections of your business loans. Your CIBIL score reflects your credibility and ability to repay the borrowed amount. In case your CIBIL score is low because of your previous loans then you may get rejected for this loan. When a CIBIL score is 720 or above then lenders are interested to give loans to such applicants.


4.    Income: - If your business is existing in the market for one year or longer than that, then you need to submit your income proof for your business. And to get your loan approved in one way the business should be making a good income. If your business is start-up then you need to show your business plan and growth strategy. This gives an impression to the lenders that the business or company which is not making enough money cannot pay back the loan amount, and hence consider them as not to be eligible for a business loan.


5.    Cash Flow: - Lenders will hesitate to lend you money if you have less or insufficient cash flow in the business. So having a good cash flow will increase your approval chances. However, you can always optimize the cash flow in your business by taking preventive measures. Remember keeping eyes on your cash flow and finances always lead to your goals

Applying for a business loan is a short and easy process. But to avoid rejections, you need to fulfill the eligibility criteria of your lender. Be smart to know the problems in advance that your loan application might face. This will help you to eliminate those problems & get approved for a business loan.

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