Processing a Business Loan – A business loan is an amount you borrow from the lender so that you can start a business or you can grow an existing one. One such loan aggregators include Buddy Loan, that helps you work on your credit score and add more benefits.
Before you apply for an online business loan, you need to evaluate how much you need and what are the rates you are being charged.
Apply for Small Business Loan
When you apply for a business online, it is simple, hustle free, and quick. You no longer need to visit the physical office to be able to make an application. You will, however, need to check through the providers of the loan and evaluate which provider fits your bill.
Once you are comfortable, then you need to ensure that you have the right documentation to apply for the unsecured business loan. If the documentation is right, then waiting for your sanction letter.
When applying for your instant business loan online, you need to make sure your documentation is right, and your credit score is safe. This way, your business loan application will pass by the verification stage quickly, and the money will be credited into your account.
SME business loans may be categorized as short-term loans or long term loans. The loans may also be divided into secured loans or unsecured loans.
Professional Loans
Professional loans are extended to self-employed professionals such as chartered accountants, doctors, and lawyers, based on their credit history. It also varies from one bank to another as to how much loan amount can be extended to the professional and his/her trade relationship with the bank.
Trade Loans
Type of Businesses that can Apply for Trade Loans are:
- Sole Proprietorships
- Partnerships
- Private Limited Companies
Trade Loans Mainly comprises Three Types:
- Overdraft
- Working capital
- Term loan
Overdraft
These loans are based on some securities or collateral, especially in terms of bank deposits. This loan can be utilized by the customer as long as the interest is paid on time. The bank uses the client’s relationship to analyse how much they should get.
Working Capital Loan:- This loan has a lower interest and is given to the business to keep them operating. It works like an instant business loan.
Term Loan:- Term loans are the standard type of small business loan that is for business purposes. When you apply for a business loan, the entire amount in a term loan is disbursed, and EMI is based on a specified pre-defined tenure.
Business loan:- As lenient as business loans maybe, a bounced check or a defaulted payment can lead to a bad credit score, which in turn might lead to negative reviews while applying for future loans. Look no further than Buddy Loan App, as it offers the best interest rates on business loans.
However, if planned immaculately, just as is the case with any loan, your credibility improves by leaps and bounds, allowing for easy and trustworthy transactions in the future.
But how?
Let us find out.
The Best way to Repay a Business Loan
There are multiple ways you can pay off your business loans. Here are some tips for planning your resources accordingly. Albeit every loan comes with its own “expiration date” and repayment terms, you need to understand the strings attached to make sure your business complies to the norms set by the lender/investor
Understand the terms and conditions.
Before signing a contract, a borrower must understand the agreement. Many business owners, due to a lack of options, jump right in and sign contracts out of desperation, which should never be encouraged. You are under no obligation to accept a contract even if it is detrimental to your business.
Keep the investors in the loop when dark times loom ahead.
If you can forecast dark times and know you will not be able to make your payments on time for a certain period, informing your investors about this sickness is of the essence.
Pay on time
As a rule of thumb, make sure you have sufficient funds to make your payments. Most term loans come with monthly payment options, so make sure you have set aside funds dedicated to paying off your loan.
Keep an eye on your cash flow and credit scores
If you have an inconsistent cash flow, you will have a hard time paying off your debts on time, ultimately leading to a bad credit score. Make sure you have a steady cash flow to cover financial flaws.
Foreclosing a business loan
There always comes a time when you believe you are capable enough of paying off your entire amount in one go, which I called foreclosure. Make sure you plan your foreclosure so as not to lose money. Loans usually work off your interest in the first year; hence, foreclosing in the first year is not a good idea as you will be paying the interest as well as the principal amount.
Buddy Loan helps you keep an eye out for all such issues. With Buddy Loan, find the business loan that complies with your requirements and matches your ability.
Aadhaar Card is one of the most Important documents
When one does decide to opt for a business, one of the first things that come to mind is, Do I apply for a business loan? Do banks provide small business loans? Is it possible to get an unsecured business loan online? Can I avail of a buddy loan where a business loan can be availed hassle-free? all this and more benefits can be crossed using Buddy Loan. Avail a business loan with Buddy Loan, now!
One of the first thoughts that comes to mind is the formalities that need to be completed as part of the process to avail of a business loan.
There are certain KYC (Know Your Customer) requirements as well. Whether applying for a loan online or whether one decides to go to a bank or a financial institution and undergo the physical process of the offline application, it is mandatory by law as enacted by the government to collect certain KYC (Know Your Customer) documentation.
- Banks and financial institutions are obligated by law to collect such information as well as to keep the said documentation updated from time to time.
- Various documents can be considered as eligible to be considered as eligible or valid KYC (Know Your Customer) documentation. Some such documentation would include Passport, Voter Identity Card, Driving License, PAN Card, NREGA Card as well as Aadhar Letter/Card.
- The KYC (Know Your Customer) documentation is required as proof of identity as well as proof of address/residence. Anyone document is allowed, and Aadhar Card is not mandatorily required as a KYC (Know Your Customer) document.
Also Read: How to Get a Personal Loan: A Complete Guide on Eligibility and Documents
However, before 2018, many or almost all banks and financial institutions into a document made Aadhar Card mandatory to open accounts as well as to avail loan facilities with them as per the directives of the Government of India.
- The Aadhar Card was sought to be an identification document that is similar to the Social Security Card in the United States of America. Therefore, to avail of loans either offline or through the online mode, Aadhar Card was a mandatory document without which, the loan was liable to be rejected.
- However, according to the judgment given by the Hon’ble Supreme Court of India, banks may use the Aadhar Card as a KYC (Know Your Customer) only in case the customer consents to its usage. The Reserve Bank of India has also issued such clarification in light of the decision given by the Honable Supreme Court of India.
- Though Aadhar Card is not mandated in many cases, it can be said to be a comprehensive document, in that it includes the name, address as well as fingerprint information of the individual and therefore, the process of verification via the electronic mode is faster and cheaper.
Banks have an E-KYC process where KYC (Know Your Customer) verification has been digitalized. In such a scenario, even though Aadhar Card is not mandatorily required, it does speed up the verification process and enables faster processing of the business loan. Even financial institutions prefer the Aadhar Card for faster verification, whether the loan is sought through the online or offline mode.
In case a loan is sought through the online mode, it is even possible to get an instant business loan online in case Aadhar Card is uploaded as a KYC (Know Your Customer) document as the identity verification can be instantly done, and the KYC (Know Your Customer) process can be instantly completed because the identity of the borrower can be instantly verified through the e-verification process.
Aadhar Card, are mandatory KYC (Know Your Customer) document, it is still the most preferred document in terms of ease of use and verifiability.
The Main Features of a Business Loan!
In today’s economy, lenders have become increasingly approachable. With the doors open for all types of borrowers, a business loan comes in handy when the borrower has specific requirements. Buddy Loan can help increase the benefactors with the business loan you avail.
You can get a business loan to set up a shop, or expand his/her business.
But what exactly is a business loan?
Let us Understand What is a Business Loan in Terms of you!
A business loan is a type of loan intended to be used with a business module in place. Be it to start a business, or to expand a business; business loans are designed to comply with a borrower’s requirements and plans depending on the business module in hand.
Business loans are available in an almost exhaustive range.
Bank loans, guarantor loans, mezzanine loans, asset-based financing, equity-based financing, invoice-based loans, microloans, and startup financing are some of the broader categories one can choose from that caters to his/her requirements.
Salient Features
Business loans, in a sense, are better than “bad credit” loans like personal loans. Here is a unique list of features a business loan has to offer.
- Convenient and accessible: Applying for a business loan today is no mountain climb is you have a good credit history. There are hundreds of options available in the markets today.
- Multiple options: We now know a business loan application is not limited by the choices available to him/her. The borrower can opt for the option best suited for his/her business needs.
- Flexible repayment options: Business loans are designed in a way so as not to hamper the current business module of the borrower.
- Hassle-free business loan application process: These loans are so quickly disbursed, a borrower need not run around in circles and can apply for a loan online unlike the old traditional ways.
- Instant approval: Business loans are usually disbursed within 24 hours, depending on the amount the borrower has applied for. Even so, a borrower does not have to wait for days to get his/her business loan approved.
- No collateral required: This, of course, depends on the type of loan a borrower has applied for. Unlike mezzanine loans or asset-based financing, most business loans do not require collateral or a mortgage.
With lower interest rates, business loans are designed with such ingenuity that these do not hamper your current cash flow and instead aid in regulating and improving your current cash flow.
Connect with the best-suited investor via Buddy Loan, to meet your financial needs. With Buddy Loan by your side, running around looking for investors is a thing of the past.
The Uses of Business Loan
A business loan is a money you procure from a lender to be able to facilitate the operations of your business. It may be a secured business loan or an unsecured business loan. Make life easier and better by availing of a business loan with Buddy Loan, and get high benefactors.
The lenders have made it easy for you to apply for an instant business loan online. Confirm that you fulfil the requirements to apply for an online business loan and decide on the amount you need. Make your application and wait for the bank to verify your request.
Also Read: A Business Loan That Can Expand Boundaries!
Purposes For the Instant Business Loan are
Expansion
One of the reasons why businesses apply for SME loans is to expand. When business is flourishing, you may need an expansion opportunity. Make sure your cash flow is in place & profits aren’t disturbed when opportunity knocks. You approach a bank and request a business loan. Start a business.
Start a business
The most common reason people apply for an unsecured business loan is to start a business. As much as this is not a very wise reason, it does offer a reprieve for dire situations.
Purchase Equipment
Almost all business requires equipment or two to run efficiently. This expenditure being capital in nature may be burdensome for a new or expanding business to bear. Therefore, a business loan would come in handy to assist the business.
Inventory
A business continually needs to stock its inventory. They need to have stock they can sell as their buyers prepare to pay for what they have bought from them. If you are aware, a business manages one of the largest and most complicated tranches, inventory. You always have to stock enough options for your customers to buy. Consider applying for a business loan online to stay ahead of trends and customer demands, as well as keep your cash flow optimum.
Cash Flow
Cash flow is crucial and it is essential to take care of it in the odds like no payment, stuck with inventory, then cash flow may be a problem. However, you need not be stuck when you can apply for an SME loan online to finance your cash flow. Your business stays afloat as you can pay for your operating costs using the money.
A short-term loan provides money to be used for your regular operational costs and can help your business survive when profits are low. By keeping money flowing through your business, you can continue to get new customers to drive revenue while making up for other losses. Apart from knowing the features of a personal loan via a loan aggregator, the uses of the loan help you time the progress of your business for expansion.
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