Instant Business Loans: 6 Helpful Tips You Should Know

BusinessInstant Business Loans: 6 Helpful Tips You Should Know

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An instant business loan provides a financing solution to startups or even well-settled companies to function seamlessly. By acquiring the capital needed, businesses can ensure operations aren’t affected and work can go on as intended.

An instant business loan is especially beneficial for unexpected expenses, as it offers immediate funding. Moreover, business loans can help ensure that you do not miss out on any growth-boosting opportunities by giving the necessary financial backing.

However, business loan approval can take time, and delayed approvals can have negative effects on your business. It can result in missed opportunities or strained customer relationships.

Thankfully, there are a few tips that you can try when applying for an instant business loan. Read on to know more.

Have a Defined Borrowing Plan and Purpose

To avail of an instant business loan, the first step is to have clarity about the purpose of the loan. If you are looking for a loan for a start-up business, it is essential that you have a strong business plan and present a strong business profile.

This can increase your chances of getting your instant business loan approved.

On the other hand, with established businesses, the needs may vary. You may need funds to address your working capital requirements, or to further grow and expand your business. For this purpose, you must keep the necessary plan blueprints, financial documents and ready for the lender of your business loan.

The chances of getting your business loan approved increase significantly when the lender finds that you have a solid financial plan and the business operations are running smoothly. This also helps the lender trust you and shows that you are capable of repaying the instant business loan.

Maintain Optimal Bank Balance

Maintaining a healthy bank balance in your business accounts is a significant factor that lenders look for before approving an instant business loan. You need to have surplus capital to handle loan payments. Without it, lenders are less likely to approve your application. 

In addition, a positive bank balance makes your business look stable and profitable. This can significantly increase your chances of getting your business loan approved quickly.

An optimal bank balance provides multiple advantages to your business:

  • Shows financial stability
  • Increases confidence in your business
  • Depicts creditworthiness

Also, by having enough liquidity to take on the loan, lenders are less likely to view the business as a risk. This is crucial, especially if you need capital urgently, and on affordable terms. Lenders will not approve loans for businesses with subpar inflows. 

Plan to Borrow Funds Optimally

Evaluate the required amount of the instant business loan before sending out the application. By knowing precisely how much funds you need, you can better optimise your outgo. This is only possible if you do not over or under-borrow.

As mentioned, having a realistic approach to planning is key, and lenders are likely to respond positively when you borrow within the business’ capabilities. This ultimately affects the repayment plan, which lenders consider as well.

Having clarity on the loan, the repayment strategy, purpose, and the approach showcases that you are a confident borrower. Clear plans for your business show that you will be serious about payments, and this improves your chances of getting approval.

Research and Compare

It is crucial to research and compare various types of business loan options available with different lenders.

Note some of the critical points to look out for:

  • Eligibility of the business loan
  • Background and trustworthiness of the lender
  • Rate of interest on the loan
  • Fees and charges associated with the loan
  • Document requirements for the loan

With multiple loan options to choose from, it is understandable that the process of borrowing can be overwhelming. There are many options available in the market, such as the Lendingkart business loan, HDFC business loans, Axis Bank business loans, etc.

However, comparing different lenders and their schemes and looking out for the important factors is the way to go. The final decision to borrow an instant business loan demands proper research as it will affect your working capital and your profits, if done poorly.

Maintain a Consistent Cash Flow

Having adequate and consistent cash flow ensures that the business operations are running smoothly and your business is profitable. This is an important criterion to meet as it can get your business loan approved quickly.

If you do not have a consistent cash flow, the lender incurs a greater risk by lending to your business. This is why it is important to have adequate cash flow and the documents to prove it. It can also help if you have upcoming projects or opportunities, as these can prove that you will have the cash flow to handle payments.

Maintain Creditworthiness

Maintaining a good personal as well as business credit score is essential. Your CIBIL score is a 3-digit number that ranges between 300 to 900 and depicts your creditworthiness. Some of the factors that can reduce your CIBIL score include the following:

●       Missing EMI payments or defaulting on loans

●       Applying for multiple loans at the same time

●       Having a high credit utilization

●       Not having experience with different types of credit

A good CIBIL score can increase the probability of your business loan getting approved instantly. On the other hand, a low CIBIL score can lead to getting your loan rejected by the lender.

Therefore, before applying for a business loan, you should work towards improving your credit score. Thankfully, there are many ways to improve your CIBIL score, and some of them are fairly easy to do as well.

For one, you can pay your smaller, short-term credit accounts and close them. Secondly, you can also check your credit report for errors, and get them rectified. Certain errors in your credit report can lower your score, and getting them fixed can improve your score with minimal effort. 

These are some of the helpful tips you can try to increase the chances of getting an instant business loan from leading lenders. Remember, lenders require you to exhibit that you are a responsible borrower. In doing so, you instantly improve your chances of getting approval. Another option is to avail a pre-approved offer, if one has been extended to you by a lender. 

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