Planning to take a business loan? Here are two things to know before applying for MSME loan and ensure approval in one go.
1. Prepare a business plan
Having a clear and concise business plan in place will enhance your business loan approval rate. A sustainable business plan that clearly acknowledges all the expenses and assigns an effective financial framework to resolve them, convinces the lender of your repayment ability. The primary elements of a good business plan are a long-term vision, clearly defined momentary objectives leading to the end goal, a practical financial framework; and a realistic crisis management plan. So, if you’ve planned to finance your business growth and expansion using a business loan, start with an irresistible business plan.
2. Get rated by a Credit Agency
Getting your business rated from credit agency enable you to control the outcome of your loan application.
Money lenders are going to consider your CIBIL score anyway, therefore, it is advisable to get your business evaluated from a reputed credit rating agency before applying. This will give you an upper hand on your MSME loan approval rate, and you’ll be in a position to rectify the gap in your credit score. Besides, the valuation of your business will also give you a professional clarity on the viability of the company from a financial perspective, simplifying the whole process of procuring the business loan.
Bottom line: Whether an existing customer or a new one, considering the two factors is imperative if planning to take a business loan.
Aman Khanna is an experienced financial advisor who is well known for his ability to foretell the market trends as well as for his financial astuteness. He has an MBA in finance from Toronto University as well as years of experience delivering seminars on sound financial practices and debt management.