Steps to Take Before You Apply For a Commercial Loan

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    Blog posted on : 25-03-2021

    Steps to Take Before You Apply For a Commercial Loan

    If you are looking for funds to expand your business, you are at the right place. Growing a business requires funds and it is not easy to get quick access to funds in the market. No matter the type of business you own or the industry you operate in, you will have to make sure that your business is ready for expansion and it receives the funds you need without any delay. Applying for a commercial loan is the best way to take your business forward. The loan is available for all sizes and types of businesses across different industries. However, before you proceed to apply for the loan, you need to take the below mentioned steps.

    1. Estimate the amount- It is advisable to never apply for a loan without estimating the exact amount of funds you need. You need to consider the purpose of borrowing and estimate the amount you will need to achieve the same. It helps to spend maximum time on this because applying for a wrong amount will put you in trouble. If you overestimate the need of funds, you will have a higher debt to repay and if you underestimate the same, you might not be able to fulfil the repayment requirements.

    2. Prepare a business plan- Put a business plan in place to ensure that the lenders have all the information they need. The business plan should include details about the inflow and outflow of funds and you should be able to show viability of the business. It must include the income and expenses as well as a projection of how you intend to use the funds and the revenue it is estimated to generate. You can seek help of a professional to create a business plan.

    3. Research the market for lenders- Do not apply for a commercial loan with the first lender you come across. You must scout the market and look for different lenders that cater to your needs. This will help zero in on a loan that aligns with your business goals. Compare the eligibility criteria and the interest rate offered by different lenders before making a decision.

    4. Make the loan application- You need to fill the online application form and submit documents of KYC of the partners, business registration proof, bank statements, ITR, and income statement and balance sheet and projected income statement and balance sheet. If you have a good credit score, the loan application will be approved in no time. You must understand the terms and conditions of the loan thoroughly before you sign on the dotted line.

    If everything is in place, the loan application will be approved in no time. A commercial loan will help your business grow and achieve your goals. It is the first choice of many lenders in the country and has helped businesses grow and expand. No matter the type of business you own, follow the above-mentioned steps to apply for a loan.
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