When it comes to fueling business growth, nothing is better than the power of easy availability of capital. Whether it’s about expanding operations, investing in new technology or equipment, onboarding new staff, or investing in new capabilities; one of the key inputs to your decision-making is the funds you have on hand and the funds you’re able to comfortably raise.
In the old model of growth, we funded our growth – we ploughed back our earnings and slowly grew year on year. That model still works, of course. However, in a business era defined by disruptions, it can also be a model that directs a business down the road to oblivion. You see, the state of your savings can’t be the determining factor when it comes to acting on a time-sensitive business opportunity, and you definitely can’t rely solely on savings alone, when market disruptions set your business back, albeit temporarily.
This is where Business Loans can be a huge enabler for both growth and stability. Today, businesses no longer need to suffer a tedious loan availing process – most loan providers understand business needs and tailor their products to fit those needs. Poonawalla Fincorp, for instance, prides itself on a loan process that occurs completely online – all you need to do is apply for the loan online and digitally upload the necessary documents required for business loan . Most Poonawalla Fincorp customers have never even had to step into one of its offices, because the loan requisition is approved, processed and disbursed online!
How to Apply for a Business Loan
Check your eligibility
The first step is to check your business loan eligibility with the lender. Poonawalla Fincorp has kept its eligibility criteria super simple: you must be between 24 and 65 years of age (at loan maturity), your business must be at least 2 years old and must have an annual turnover of at least ₹6 Lakh.
Work on your credit score
A higher credit score generally translates into a lower interest rate and better loan terms. If possible, work towards building up your credit score in the months leading up to your Business Loan, so you can take advantage of more favourable loan terms.
Determine your needs
Remember that a loan is an expense – your outflow on interest must be considered when you calculate your ROI. Examine your needs critically, arrive at the figure you need to borrow, and create a strategy around timely repayment.
Calculate your EMI and balance the total costs
Further to the previous point, understand the total cost of the loan. Most people consider only the interest rate. However, the loan tenure also makes a significant difference to the total cost of the loan. The longer your tenure, the more interest you pay, but the lower your EMI. It’s important to balance your need for lower EMIs with your interest burden over the long term. In the spirit of transparency, Poonawalla Fincorp provides borrowers with an Business Loan EMI calculator customised to each of their loan products. In this way, a borrower can try out various combinations of interest rate and tenure to arrive at a comfortable EMI amount that feels affordable and balances out the total cost of the loan.
As with all other inputs to your business, evaluate your loan providers and their products critically. Comparing only the interest rates is a poor barometer – use the total cost of the loan instead. Also, look at other factors: charges and penalties, the flexibility offered on repayment, accessibility, reputation and level of tools provided for customer service.
Once you’ve chosen your preferred loan provider, collect your documentation and apply! Poonawalla Fincorp makes the loan process incredibly easy by minimising the documentation requirements. All you need is your Company PAN Card or Director/Proprietor PAN Card, Proof of Address (Aadhar Card/Voter ID Card/Passport), Business Address Proof (Rent Agreement/Utility Bill) and financial documents like bank statements and IT returns. As previously mentioned, the whole loan process can be completed online, without needing you to leave your office.
The Poonawalla Fincorp Advantage
Poonawalla Fincorp understands that every penny counts when you’re running a business. This is why, in addition to offering the lowest interest rates in the industry and a hassle-free loan process, Poonawalla Fincorp’s Business Loans are also collateral free. Moreover, Poonawalla Fincorp believes in complete transparency. Hence, it not only provides a free EMI calculator on the website but also spells out all charges online.
Poonawalla Fincorp also believes in creating loan products that allow you to act with financial prudence. If you have windfall gains, or if your earnings go up, it makes financial sense to repay your loans early and save upon the interest component. Poonawalla Fincorp agrees – which is why these Business Loans offered by Poonawalla Fincorp carry no prepayment penalties. Your growth doesn’t need to be expensive & complex. Combined with the industry’s lowest interest rates, these loans save you money not only in your total interest outgoing but also make it possible for you to save more through hassle-free, penalty-free prepayments.
Moneycontrol journalists were not involved in the creation of the article.