Nothing is certain in business. A business owner has to face several financial crisis and drops and often face a situation to raise funds. This has increased demand for a business loan at the time of external fund requirement. In order to have enough capital and liquidity for a business, loans for business is the best option. Before applying, it is necessary to know the factors that affect loan eligibility and Business loan interest rate. Factors that influence the interest rate for a business loan
Size, type, plan and vintage of business: A lender offers the business loan consider the type, size, vintage and plan of the applicant’s business. All these factors reflect business growth in future and credibility to repay. low-interest rate and less loan amount mostly have a high-interest rate. CIBIL Score: Credit score is the primary factors that a lender considers in a business loan. A good credit score lowers the interest rates for such loans. It is necessary to improve the CIBIL score before applying for this loan. Loan tenor and annual revenue: Business loan interest rate gets lower with higher loan tenor and increases with short loan tenor. High annual revenue of the business also lowers the interest rate. Read Also: What are the Factors that Affect Your Business Loan Interest Rate?
0 Comments
Leave a Reply. |
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. |