Th lending business and lenders have a common concept all across the globe – no poor debt. Lenders just want to lend to businesses which are successful and can pay back the debt alongside the interest payments on time.
In case you are planning to apply for an SME business loan, the process is no longer difficult, due to FinTech firms like Indifi coming into the picture and making the whole procedure less hassle-free. While all procedures are from the lender’s viewpoint and there is not much you can do as a borrower, there are some steps to take to make sure your loan is approved. Let’s check out a few tips which accelerate the chances of getting an SME loan approval:
- Keep confidence about your business and its development
When you are seeking to borrow an MSME loan, your prime criterion must be to develop the business with the funds taken and not repay the current debts. While applying for the loan, believe in your business; know every detail directly from documentation, and compliance to the product marketing. Having extreme know-how regarding your business can help you go a long way.
- Submit a precise application
Not every application received by the lenders contains a precise detail. The detail you provide in your application will be utilized for deciding its legality. You will incorporate the name, birth date, personal address and your company address and its registration number. The application will be rejected if the lender finds the details wrong. So make sure to fill up correct details while applying for MSME loans.
- Check your credit history
Let’s accept the fact that maximum SME loans in India are approved based on payback ability, viability, and your CIBIL score. Although for a business loan, a personal CIBIL score doesn’t matter a lot, to get a faster SME loan approval, having a perfect credit history showcases positive indications to the lender.
- Maintain business profitability and correct accounts
Lenders don’t wish to lend funds to a loss-making or diminishing organization. So, maintaining and developing earnings and profitability showcases a powerful indication of the business and the borrower. Lenders who utilize automated systems will refuse a business directly if they find it loss-making. If you cannot show business profitability in the past years, show healthy activity signs, payback ability, and revenue to get faster loan approval. However, to avail an unsecured loan for SME in India, you don’t need to show any collateral against the loan.
- Select the right loan option
With various kinds of SME loans out there, you should select the lending option which meets your requirements. Don’t go for a big amount if you can’t pay the EMIs. You should consider some criteria before selecting the right loan for you. Moreover, you must have a good purpose for taking the loan. Lenders usually want to know your loan purpose.
- Make more than one payment plan
Think about the MSME loan amount, purpose, and duration, and then prepare two distinct payment strategies. Having a precise payment strategy and a backup will help you become a liable borrower and will certainly improve the scopes of approval.
- Approach FinTech lenders
Traditional lenders like banks usually don’t provide the best interest rates or competitive SME loans in India. Aside from the rates, they don’t usually serve the requirements of SME markets. With the proficiency of NBFCs and FinTech arriving in the market, you should approach these digital lenders.
Indifi provides SME loans in India to different businesses with high development potential at affordable rates. Aside from this, we approve loans within 2 days and without collaterals. To conclude this, all we can say, while the loan approval is not in your hand, you must remember the aforementioned tips which you need to be attentive about before applying for your loan in order to have a positive effect.