Festival season in India is right around the corner! We’re already in September. Soon it will be Dushhera, followed by Diwali, and then Christmas! The next couple of months will go by fast as everyone meets their friends and family, reconnecting after a long, hard year due to the pandemic. This is also historically a time when consumers and businesses tend to buy new things to celebrate new beginnings!
If you’re a small business owner, now is the perfect time to apply for a business loan or to prepare your business for a loan it will need to meet the expected increase in demand in the coming months!
At CreditEnable, we’ve helped thousands of SMEs assess their loan eligibility for free and improve their attractiveness to lenders. So, let’s talk about why you should apply for a business loan right now before the festival season crunch.
Why should I apply for business funding before the festival season?
Our simple answer – it’s better to be prepared for something rather than scramble last minute! A business loan is a complex matter, and it’s challenging for small businesses to get a business loan with a formal lender overnight.
You will need time to prepare your loan application and supporting loan documentation (including your business registrations, licenses, business plan, financial statements, etc.), then the lender will need time to complete their assessments, verifying and validating all the information and documents you’ve submitted.
What do I need to do to prepare for a business loan before applying?
If you’re missing a document or need to update a license, that’s going to be difficult to do around festival season. Government offices may slow down operations during that time, unnecessarily delaying you from getting the loan you need to prepare your business for the festivals!
Finally, even though you may get all your documentation in order, there is still a chance that the first lender you apply to does not approve your loan request. There are many factors lenders consider when assessing your creditworthiness, and it’s possible that unknowingly, you may not fulfil one or more of their criteria.
Now you’re left with a hard pull on your credit report and a business loan rejection. Both combined may negatively impact your credit score and your future business loan prospects!
Learn what a hard pull of your credit report is.
So, the first thing you need to do before applying for that small business loan is to do your research and shop around to find the right lender and the right loan product that meets your business needs, and one that you tick all the checkboxes for!
What factors do lenders consider when making the decision to lend to me?
Each lender has its own assessment methods. In general, lenders will consider the following things, amongst many others, when making their lending decision:
- Your business sector
- Your business performance compared to other businesses in the sector
- Your business plans
- Your business vintage
- Your annual turnover
- Your business credit report
- Your credit history
- Your credit utilization ratio
- The collateral you own
- The business bank statements for a specific period
- Your GST/tax filings from a specific period
- Your business registrations and licenses
- The individual credit report of all owners/directors of the business
How do I decide which lender and loan product is right for my business financing needs?
1. Be clear on what you need the business loan for
Lenders offer many different SME financing options, from unsecured business loans that do not require collateral to overdraft loans that provide you with an extra cushion of cash that you may or may not utilize but keep as a backup.
You must decide what you will use the loan for so you can apply for the right business loan. Whether you want to invest in more stock, cover overhead costs, or buy new machinery for your business, each of these purposes has a loan product available in the market, and each of the products has different loan terms and interest rates.
2. Decide what loan terms will work for you
Calculate how much financing you need, whether you need a short-term business loan or a long-term business loan, and whether you have any collateral you can offer the lender in exchange for the business loan.
Your needs and what you can put up as collateral will determine how much the lender can lend to you and what loan terms they will offer.
3. Use CreditEnable’s technology platform to match with the right lender and small business loan product for free
Typically, after you decide what business loan you need and how much you need, you will go from one lender to another, comparing business loan products and loan terms. You would do this to determine what lender is most likely to offer you the best loan terms that meet your business financing needs.
This exercise will cost you time, money, and mental peace. You won’t focus on running your business because you’ll be busy negotiating with the lenders and preparing your application. This way, it could take 4-6 weeks before you get the business loan! By then, festival season is already here, and you don’t have any time to update your stock or prepare your business for the increase in customers.
We have a simpler solution for your business financing needs. At CreditEnable, we’ve eliminated the need for you to shop around. We partner with over 25 leading lenders in India, including Lendingkart, ICICI Bank, Kotak Mahindra Bank, SMECorner, etc., to digitally match our SME customers with the right business loan product for their needs from more than 100 specialized SME loan options!
And applying for a business loan with one of our lender partners through CreditEnable has NO NEGATIVE IMPACT on your credit score as we only do a soft pull of your Experian credit score to check your loan eligibility when you apply.
Learn what a soft pull of your credit score is.
How do I apply for a business loan online with CreditEnable?
Applying for a business loan with CreditEnable is simple and free!
Step 1: Complete our short survey to tell us about your business.
Step 2: Based on the information you’ve provided and your Experian credit score, we verify whether you meet our lender partner requirements.
Step 3: If your Experian credit score is 750 and above, and you meet their criteria, we ask you to share your business loan documents.
We collect all documentation required to get the business loan digitally and in one go so that you’re not bothered by surprised requests for documents one after another by the lender.
Step 4: After assessing your loan documentation, our smart technology matches you with a lender partner and product that meets your business financing needs.
Step 5: If the match works for you, we go ahead and submit your complete application package to the lender.
Step 6: We work with you and the lender to finalize the right terms and interest rate for your business loan.
Step 7: The money is in your bank account, and you can start preparing for the festival season!
We’ve helped small businesses get unsecured business loans in as little as 2-3 days and secured business loans in 7 days! We can help you too!
Apply for a business loan with CreditEnable today!
Zero Hassle. Zero Fees.
Business Loans. Enabled Simply.