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Every business owner dreams to grow their business exponentially. Growth is a constant lookout for any entrepreneur. This is why it becomes extremely essential to meet all the monetary needs. A number of MSMEs (micro small and medium enterprises- companies) are not able to reach their vision due to limited assets.
In such a circumstance, taking a business loan from a bank comes out to be a smart decision. But, before you get a loan from a bank, you should know if you are eligible for a business loan or not.
Who is applicable for a business loan?
To avail a loan from a bank, you need to follow some steps which include:
- Individuals who are self-employed, proprietors, or have partnership firms, Private ltd Co.
- If one is involved in the business of trading, service or manufacturing.
- The turnover of the business should be approximately 40 lakh rupees.
- If you are into business for a minimum of three years.
- Should have a total business of five years.
- If a business is earning profit for two years.
- The ITR Minimal Annual Income should be 1.5 lakh rupees per annum.
- Most importantly, the applicant should be 21 years of age while he/she applies for the loan. And, the applicant should not be older than 65 years of age at the time of loan maturity.
Important documents for verification
Now you have an idea if you are applicable for the loan or not. This is the time to know about the necessary documents that are required to apply for the loan.
- Identity proof
- PAN card
- Address proof
- Proof of business
- Business and personal bank statements of the last six months
- Business and personal tax return records
- Business’s financial statements
- Legal documents such as commercial lease, and franchise agreement.
What to do if your loan gets rejected?
There will be times when your loan application will be rejected. It will have a negative effect on your eligibility. This is why it is essential to meet all the eligibility requirements for the right loan. Finndit makes the loan-taking process easy by providing professionals. According to the professionals take care about:
- The reason for application rejection
- Revise your credit report
- Improve your business’s financial standing
We hope this article has helped you with the prerequisites to make an excellent business credit score. Before you take a loan, remember that you always choose a loan lender that offers you the best terms. Taking the right business loan at the right time from the right institution is the only way to get hassle-free support to grow a business.
