A business loan is a perfect way to grow your business if you have a proper plan to get your business to new heights. In such situations, you can go directly to a financial institution and apply for a loan online or offline.
As there are many benefits of business loan in india for the expansion of various SMEs, there are some myths associated with it. But all of them are not true. It diverts the borrowers from availing the loan. Here are some myths that you should ignore while you consider applying for a business loan in India.
6 Myths of Business Loan Must Ignore
1. It’s Difficult To Secure A Commercial Loan
A widespread misconception about the business loan is that it is tough to get approved. But, just like any other third party who is willing to lend the loan, financial institutions also check some authorized certificates and documents. The company should maintain a good credit score to assure financial institutions that they can easily rely on the company for the repayment of the loans. Companies can always use a business loan calculator to figure out if they have a good credit score to get the proposed amount of loan approved.
2. A Credit Score Is The Only Criteria
There's no doubt about credit score not being the criteria. This is a myth. A company doesn't have to be afraid if it's credit score is not that good as it is not the only criteria to get a business loan application. financial institutions prefer to lend loans, and they continuously help you to get them basis other parameters. If a company has a significant cash flow, financial position, or if the managerial experience is acceptable by the financial institutions, then the financial institution will easily lend you the loan.
3. Online Loans Are Risk-Prone
Some companies hesitate to apply for loans online. Some may think that by applying online, they are increasing the chances of fraud. This is a complete myth because the best business loan deals can only be cracked online, and the probability of turning into a scam victim decreases because the internet is the easiest way for a company to compare loans offered by different financial institutions.
4. LPA Is The Only Way To Secure A Commercial Loan
It's not always true that a commercial mortgage is a property loan. You don't need to keep the property as collateral for many small and new businesses. Even our Finance Ministry has launched schemes that allow new companies to obtain a loan without any collateral property.
5. Big financial institutions Are Better For Business Loans
It's not at all true that for business loans, only big financial institutions are ideal. Many small financial institutions and NBFCs are providing you with business loans at the same or lower rate than any big financial institutions in some cases. It may be true that big financial institutions will give you more options for a business loan depending on your loan amount and qualifications, but that doesn't mean you can't go with small financial institutions and financial institutions.
6. Considering Only The Interest Rate
There are many other points to consider when finding a lender for your business loan. Some of these considerations include processing fees, processing time, other taxes and charges, the lender's credibility, the period in which you collect the loan. Please weigh all these considerations together with your lender's interest rate.The reason for which you are taking a loan doesn't matter, what does is your ability to repay it. One can use the free business loan EMI calculator to know the EMI amount you have to pay per month or per year by submitting the values of loan amount, tenure, interest rate. And if you have certain documents and your credit score is acceptable by the financial institutions, then you can easily apply for a loan expecting it to get approved.