Funding is a vital aspect to start and expand any business. And since the funding options are also numerous these days, it can be quite confusing for the business owner to pick and choose what he/ she needs. One option available to small business owners, is availing a small business loan.
Banks and NBFCs like Bajaj Finserv offer different types of such business loans. These loans come with a host of benefits including an affordable and competitive interest rate. There are even special loans for self-employed professionals like doctors, engineers, chartered accountants, etc.How To Pick The Right Type Of Loan
Picking the right type of loan is easier said than done. However, it is not impossible to do, if the following factors are considered:
Necessity Of The Capital: Answering the fundamental question of why the capital is needed, is the first step to choosing the right loan. It is important to know whether the money is actually necessary, and whether it is needed for a long-term or a short-term goal. This is because the loan could be a long-term or short-term one, depending on this fact. And you will also be able to decide the repayment tenor accordingly.
Moreover, if the lender has an idea of why the capital is needed, it makes the loan approval process easier as well.
Amount of Capital Needed: Once the necessity of the capital is known, it becomes easier to calculate the amount that would be needed. Depending on this, a borrower can opt for the type of loan that offers the amount they need. For example, Bajaj Finserv’s Business Loan For Doctors offers money only up to Rs. 30 lakh, while their Loan Against Property For Doctors offers a capital of up to Rs. 2 crore.
Additionally, borrowing too much or too little can seriously derail a company’s finances.
Importance Of The Credit Profile: The borrower’s credit profile – both personal and that of his/ her business – is quite important to the lender. This is because the credit score is a measure of how likely the borrower is to repay the money. Thus, the higher the borrower’s credit score, the more likely banks and NBFCs are to approve his/ her loan application.
This is particularly true while availing unsecured loans, which most business loans are. And although this is not the only condition, having a good credit score definitely improves the chances of approval for a less-than-perfect company profile.
Interest Rates And Repayment Scheme: The business loan interest rate is quite obviously one of the most important factors to consider, while deciding on a loan. It is important that you do not exceed your budget, and that you have a definite plan in place to repay the loan as well.
Additionally, having a clear business plan that is sure to generate revenue proves to the lender how serious you are about your business. This in turn improves your chances of loan approval.
Bajaj Finserv offers competitive interest rates on its loans, so that it’s easier for you to pay your EMIs.
The Speed Of Disbursal: The speed with which a loan will be approved and disbursed is also an important factor to consider. Sometimes, the borrower may need the funds almost immediately. In such a situation, a borrower cannot opt for a loan that will take weeks to be approved and disbursed.
Luckily though, NBFCs like Bajaj Finserv approve these loans within 24 hours and disburse the funds within 48-72 hours.
Lastly, it is important to note that while going to apply for doctor loan, certain basic documents will have to be submitted. Having those ready at hand would greatly ease the process of application.