How long will it take me to get a digital SME loan?

Digital SME loan

If you’ve ever seen an ad for an SME loan or any other financial services, you may have heard of something known as turnaround time (TAT).

In simple terms, the TAT is how quick the lender can process your loan application and get your SME loan. But have you ever wondered why some digital lenders say you can get your loan in 4 hours while others say 2 days? What is a plausible TAT, and how does a lender calculate TAT? CreditEnable will break it down for you.

What is an SME loan turnaround time (TAT)?

To calculate an SME loan TAT, you can break down the loan process into 3-steps:

  1. Application
  2. Loan decision and approval
  3. Loan disbursal

A loan TAT is how fast the lender can process your application and get your loan disbursed and in your bank account. It is measured in minutes, hours, days, or weeks. In the past, getting an SME loan would have taken you anywhere from 4-6 weeks. As more and more SME lenders in India begin to use artificial intelligence and advanced technology in their risk assessment, this TAT has drastically reduced.

Digital lenders start counting your SME loan TAT when you submit your complete loan application, including your supporting KYC and financial documents. So, the next time you see a loan advertisement that says, “Get a business loan in x-hours!”, know that they mean this timer only begins once you give the lender all the documentation needed to process your application.

What are the steps of getting an SME loan?

Step 1: Application

Every loan process starts with you filling out a loan application. Since many lenders now offer online SME loans, you can either submit your application digitally or in person at a physical lender location.

When filling out your application online, it is recommended that you keep the information you will need to add to the form handy, so you don’t prolong this step. Most digital SME loan applications ask you to submit your personal and business KYC information and documents, your GST registration certificate (if applicable), partnership or incorporation papers (if applicable), your bank statements for at least the past 12 months, and your audited financials (if the loan you require is over a certain amount).

So, if you don’t remember your Aadhaar number or PAN, these are the kinds of information you will need to be ready with when filling out your loan application.

Once you submit your digital SME loan application, the lender conducts an eligibility check. This involves checking your bureau report and other parameters like age, location, business type, etc. to verify whether you clear the basic eligibility to get an SME loan with the lender.

Some lenders may also have a more elaborate eligibility check based on your financial needs. In addition to the first application and set of documents, they may contact you for additional information and a supplementary application which may require more detailed information than the first application.

After you clear the eligibility check, your application moves on to the next step.

Step 2: Loan Decision and Approval

This step can be the most time-consuming in an SME loan TAT. Once your complete application and supporting documents have been submitted and your basic eligibility verified, your application is sent to the Credit department for assessment.

As a part of the credit assessment, representatives from the lender will contact you (electronically or in-person) to conduct a Personal Discussion. During this assessment, the lender develops a complete understanding of your financial standing, financial requirements, and how you plan to use the SME loan. In addition to the personal discussion, the lender also simultaneously reviews the supporting documents you submitted with your digital SME loan application to develop a well-rounded picture of your business and its financials.

Once the credit assessment is complete, the lender decides whether to offer you a loan and what loan amount and interest rate. This amount is either decided by their loan officers or the computer software the lender is using. The decided amount is based on all the information the lender has gathered during the credit assessment as well as your current and projected financial health.

Step 3: Loan Disbursal

Once all the loan conditions have been finalised by the lender, they will inform you about their decision along with the loan terms they are offering you. As a borrower, you can negotiate with the lender to get yourself better loan terms and conditions. If you’re satisfied with all the loan terms, you will sign the contract, and the lender can process the paperwork to disburse your loan.

Once the loan is disbursed, all you need to do is use the money wisely and keep up with your EMI payments.

I’m ready to start my SME loan application.

What is an ideal TAT for a digital SME loan?.

Everyone wants their loan in the bank as soon as possible. How fast your SME loan application gets approved, and you get the money in your bank account depends on a few factors:

  1. What type of digital SME loan you apply for.
  2. What is the requested loan amount.
  3. What collateral (if any) you have put up.
  4. Which lender you apply with.

Different lenders have their own methods of conducting credit assessments, and this stage may take the longest for most lenders. In the case of an unsecured business loan, the credit assessment may be quicker because the lender does not have to spend time verifying and validating the ownership and value of the collateral you put up. Similarly, if you’re a business owner who keeps your books diligently, have all your financial and business documents in order, and have a strong credit score and bureau report, the credit assessment may not take too long.

As mentioned previously, each lender has its own methods of conducting credit assessments. As a borrower applying for a digital SME loan, you can have all your supporting documentation ready before submitting your application. That way, at least you’ve done everything in your control to make the credit assessment quicker for the lender.

Preparing my small business for an SME loan.

How long does it take to get a digital SME loan using CreditEnable?

At CreditEnable, we pride ourselves on being transparent and honest with our SME customers. We could tell you the quickest we got a customer a digital SME loan was 4 hours, but that won’t mean much to you because each SME loan case is unique.

We start counting TAT from the time we get an SME customer’s complete application package, including all the necessary supporting documents, because only then can we conduct a thorough assessment of your needs and financials.

After we understand your financial health, our award-winning lender-matching algorithms will cross-reference your loan requirements with more than 100 SME loan products that our 25+ lender partners offer on our technology platform. Our system will then find you the lender and loan product that perfectly matches your business needs and for whom you fulfil the credit criteria.

In general, we’ve helped our SME customers get Unsecured Business Loans in 2-3 days and Secured Business Loans in 7 days.

Start my loan application.

Why should I get a digital SME loan with CreditEnable?

CreditEnable is simplifying the SME loan process using technology while empowering our SME customers with the financial knowledge needed to make fully informed decisions for your business growth.

Getting an SME loan from a formal lender can be tricky, and not every business owner fully understands how the credit underwriting process works.

We increase your chances of getting the SME loan you need when you need it. 

As credit experts, we have in-depth knowledge of the SME lending sector and a complete understanding of our lender partners’ loan eligibilities. Our credit team and lender-matching algorithms can accurately assess which SME borrowers will match our lender requirements. So, when you apply for a digital SME loan using our service, we match you with the lender who is most likely to approve your SME loan request.

If you’re not qualified for an SME loan right now, your credit score won’t take a hit.

Applying for a digital SME loan using our technology platform has no negative impact on your bureau report. When we check your eligibility to get an SME loan from one of our lender partners, we only do a soft pull of your Experian credit score, and you even get a free copy of your bureau report sent to your registered email! Knowledge is power, and if you’re not eligible for the loan, we’ll tell you upfront and tell you how you can improve your credit profile, so you become eligible for the SME loan you need in the future.

However, if you were to apply for an SME loan directly with the lender and get rejected, your bureau report would be negatively impacted, which can also affect your future loan prospects.

Our service is 100% free and 100% digital. 

CreditEnable is a technology and credit-insights company, so our entire process from application submission to document collection and assessment is done online. All our lender partners also provide digital SME loans, and they accept electronic versions of all the supporting loan documents. Using technology to process your loan requests helps us keep our TAT low and service your SME loan needs faster.

Our service is also 100% free to use for SMEs, which means the only service charge you end up paying is to your lender.

Convinced? Apply for an SME loan with CreditEnable today!

Business Loans. Enabled Simply.