Every business involves various types of expenses for smooth operations and expansion of your business. It will face financial needs for purchasing or leasing new office premises or new equipment, for marketing, for technological upgrades, and for daily operations. To meet these needs, business owners may not always have enough money, so they will rely on a business loan. They may apply in a bank or in an NBFC, but nowadays it is seen that loan applications from non-banking financial companies (NBFCs) are increasing, recording an increase of 18% in FY17 from the previous year. There is no guarantee that your loan application will be approved once you apply for it. But, to make your Business Loan Pitch successful, you need to learn certain tricks. Those are: Your Business has Adequate Cash Flow If your business has inadequate cash flow, financial institutions won’t be eager to offer you a loan. They will assess the liquidity of your company to check your repayment ability. Some important liquidity ratios include current ratio, and the debt-service coverage ratio. They will review your loans, salaries, bills, inventory, short-term investments, and payments to be made by the clients, business income, and liquidity to avail from the business loans. You Must have a Good Credit Score There are certain factors such as loan defaults, negative consumer feedback, and opening of several credit accounts, that impacts negatively on your credit score. One more factor that impacts credit score is the amount of credit utilization.
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AuthorAman 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. |