The contemporary business environment is dynamic. With the ever-changing business trends, it becomes very important to stay relevant and evolve as per the industry trends. For survival and expansion, any business will need a proper strategy along with funds to transform an idea into reality. For a business man, factors such as less documentation, low rate of interest, repayment policies etc. play an important role to decide where they finance their business funding requirement from. Quick business loans are a great way to deal with working capital and other fund-based and non-fund based requirements for any type of business.
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Internal & External Research
Good research is needed to develop an internal and external understanding of the loan requirement. To apply for a loan, the business man should be clear about the loan’s purpose. In the current scenario, there are banks offering varied business loans according to different business types and requirements. KBL Xpress MSME loan is a Xpress product of Karnataka Bank which helps in financing the working capital requirements of small business loans and MSME. It is vital for businessmen to conduct a proper industry study to know about the various loan types offered by different banks.
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Maintain credit score
A credit score is an important factor to ensure your loan application gets approved. It is a score that depends on a person’s level of credit worthiness. In simple words, having a good credit score conveys to the financier that the borrower has the ability to pay back the loan amount. It majorly depends on the credit report which is being maintained by the credit bureaus. For business loans, the credit score of the businessman and of the company matters. If these scores are good, it is more likely that the lender will grant the loan and sanction the amount quickly depending upon the need base.
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Eligibility
It is a basic requirement which needs to be fulfilled. The borrower should be well aware of all the eligibility criteria before applying for a loan. Though certain requirements are mandatory, few criteria vary from bank to bank and also depending on the type of business loan. MSME Loan offered by Karnataka Bank has simplified the process, with digital verification for KYC. To apply for KBL Xpress MSME Loan, by Karnataka Bank, following is the eligibility criteria:
- All micro, small and medium enterprises conforming to the definition of MSME.
- The applicant should be a resident of India
- He/she should have attained the age of majority
- The age of applicant plus loan period should be within 70 years.
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Documentation
Documents are necessary to ensure the loan process is hassle free, but every detail is recorded for better clarity. Different banks have different document requirements. It is suggested to choose a bank which requires less documents, making the entire loan process quick, easy and hassle free. Certain documents which are needed for any kind of business loans are:
- ID proof
- Address proof
- Financial documents
- Business ownership proof
- GST details.
- ITR details.
- Existing bank transactions.
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Strong Business Plan
Banks give you business loans, if they are convinced with your business idea. So it is important to have a strong plan which has defined goals and attainable results. The idea presented gives confidence to the lender, whether the business will be able to pay back the loan amount or not.
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Collateral
For fast business loan approval, collateral is a very basic requirement. It can be provided by the company’s promoter or a sole proprietor or their close relatives on their personal guarantee. Even banks prefer collateral as loan becomes secured loan with a collateral. Collateral can be of any type such as cash deposits, equipment, other property etc. Every bank has its own policies for collateral.
Further, Micro and Small Enterprises can be given collateral-free loans under CGTMSE scheme’s coverage.
Business loans play a very important role in funding your business growth plans. Therefore, a loan must be applied at a bank which offers easy and hassle-free business loans, suiting all your requirements. Karnataka Bank’s KBL Xpress MSME Loan has simple processing and quick sanctioning, ensuring convenient banking to the customers.
