How to Get Small Business Loans in India

When ever we plan to start a new business, we have to think about business capital and the best option we think about is getting a small business loan. Not only in India but in whole world one have face financial hitch whether the person is new entrepreneur starting a new small business or an established businessman plant to expand their business. Whether the business is in initial stage or in growth phase, funds are required to keep up the business drive. Getting right office space, infrastructure, etc are initial needs to starts the business and to fulfill all these needs various financial institutions like banks, organization, etc provides business loans.

Why Small Business Loan?

Mostly, businesses raise their funds by issuing shares and debentures or simply borrowing funds from banks and other financial institutions. And there are many reasons behind it:

• Starting a new small business
• Mounting the existing business
• Compensating a shortfall in the operational resources
• Execution of a new business plan
• New Business Promotion

Way to get business loan in India

As above, we have already discussed about small business loan and its purpose and it’s the time to discuss about the main point i.e. How to get small business loan in India? This topic is very useful for the new entrepreneur as well as the established businessman in India if they are planning to apply a business loan for their business. I’ve discussed the qualities that the loan underwriter looks for while underwriting the loan application applied by the applicant.

Instructions before Application

• Decide the loan amount you need and the purpose of taking business loan.

• Determine the type of loan you are planning for your business and take appropriate decision whether to borrow it from bank, or financial organization.

• Company’s account (balance sheet, profit and loss statement, VAT or IT return documents, etc) should be updated.

• Make a cash flow report of your business of at least 1 year to show the in process of money inflow and money outflow of the firm or business organization quarterly.

• Find potential financial company or money lending consultant and ask them for application and procedures of application. The quickest way could be by mailing them, by calling them or by personally visiting them.

• Consider consulting with CA or advocate in aid to reviewing your application and lender’s clause and provisions.