How to Submit a Business Loan Application
Earlier business loan application used to be a tedious process with strict credit criteria and extensive documentation. These days business loan application has become an easy process. While business loan application process differs for each lender, a detailed understanding is required to improve the chances of getting your loan approved. However, before applying for business loans, first understand your need, capacity, tenor and type of small business loan required. You can easily apply for a business loan application by following the steps below:
1. Determine your need
The first step to apply for a business loan application is to determine your purpose for the loan, amount required, term of the loan – short/long, EMI affordability and secured/unsecured.
2. Understand business loans available
Once you have identified the need for capital investment, you can check for the types of business loans available in the business market and choose the one which fits best for your business. There are several financing options available with banks, NBFCs and financial institutions from working capital to equipment financing. Here are some of them-
a. Working Capital Finance: If there are delays in payments or crunch of liquidity in the business, then working capital finance can be a perfect fit to suffice day-to-day business operation needs. You can use working capital loan for enhancing business cashflow, settling expenses like rent, wages or for purchasing goods.
b. Equipment financing/ Machinery loan: Business is highly influenced by the technology used. A business hence needs to invest in the upgradation of it’s machinery and equipments. However, these require large capex requirements which small businesses generally don’t have. Equipment financing can help to cater such needs of your business. Equipment and machinery loans by Red Fort Capital are designed to help small businesses to secure funding for this specific cause.
c. Supply chain Financing: Supply chains are intricate and have complex relations. It is crucial to manage all the stakeholders in the supply chain while ensuring smooth cashflow. Supply chain financing solution is aimed at helping small businesses manage these short term requirements by advancing funds based on any liquid asset as such receivables, inventory, etc.
d. Last mile financing: Generally, last mile financing is opted by infrastructure developers/ real estate developers for meeting the time constraints at the last stage. Last mile financing is specifically designed for completion of the project.
3. Consider certain important factors
There are other important factors as well to be considered while applying for business loans such as business plan, credit score, EMI affordability-
a. Business plan: A comprehensive business plan must be prepared with transparency covering details about the business, industry analysis, financials, projections and clear break up of usage of the loan amount.
b. Credit score: A good credit history increases the chances of approval of loan. It shows your accountability and credibility towards loan repayment. You should review your personal and business credit score to ensure they are accurate and to address any issues that may negatively impact your loan application.
c. EMI affordability: You should ensure that your business has strong cashflows which will help service the EMIs on time.
4. Find the right lender
The next step is to find the right lender that suits your business – traditional banks, NBFCs or financial institutions. Identifying the right potential lender is important which in turn will save your time on Business Loan Application.
5. Gather the necessary documents
Lenders generally have standard requirement for business loan applications. Following are the documents required for business loan
• Bank statements
• GSTR and GST Registration Certificate
• Licenses and permits
• Business and personal KYC
• Collateral details (in case of secured business loans)
6. Use business loan calculator
Use the business loan calculators to get a rough estimate of your EMI. Use this information to check with the cashflows your business generates and ensure you have sufficient funds to service your debts.
7. Apply for business loan applications
Once you’re clear about the loan purpose, affordability, document requirement you can apply for a business loan application. You can follow these steps for successfully submitting the business loan application:
- Visit the website
- Go to apply for business loan
- Enter your business and personal details
- Upload the documents (if required)
- Submit the business loan application
Apply for a quick business loan with Red Fort Capital
About Red Fort Capital
Red Fort Capital is dedicated to empowering Indian MSMEs (Micro, Small, and Medium Enterprises) on their path to business growth through customized business loans. We understand that securing a business loan in India can pose significant challenges, particularly when factors like a less-than-ideal credit score, a relatively short business history, unclear financial records, or variable cash flow come into play.
As a respected Non-Banking Financial Company (NBFC), we take pride in offering a diverse range of secured business loans, spanning from 1 to 10 Crores. What sets us apart is our remarkable ability to disburse funds fast, in just 7 days. Our financial solutions are meticulously designed to cater to a spectrum of needs, including working capital requirements, equipment and machinery purchases, invoice/bill discounting, and last-mile financing, among others.