Whether you’re planning to start your very own business or you already have one up and running, chances are that you may be in need of a business loan. It can help you in more ways than one. With a business loan, you can meet all of the day-to-day requirements of your business and focus on expanding it through a new product line or even a new branch. But the advantages of a business loan don’t end with just that. Here’s a quick look at some of the other benefits that you get to enjoy by applying for a business loan.
Related Post: How To Make Sure You can Pay Back a Business Loan
Advantages of Taking a Business Loan
1. No Usage Restrictions
One of the best things about a business loan is that it usually doesn’t come with any restrictions regarding its usage. In fact, with most loans, you can use it for whatever business purpose you deem fit. For instance, you could use the funds from a business loan to pay salaries to your employees, purchase new equipment, or even to settle your dues to other creditors.
2. Simple Application Process
Applying for a business loan these days is a very simple and straightforward process. You can even do it online or through a smartphone application like the Finserv MARKETS app, without having to make any physical visits.
3. Improves Credit Worthiness
When you apply for a business loan and then proceed to repay it on time, you get to improve your and your business’ credit worthiness. And as you might already know, the higher the credit worthiness, the better. That’s not all. You also get to increase the chances of availing more loans at much better interest rates too.
4. No Requirement of Collaterals
Business loans, especially unsecured loans, don’t require you to pledge any assets to avail a loan. This is extremely beneficial for individuals who either don’t possess any assets to pledge or are just starting out with their business.
5 Questions You Must Ask Before You Apply for a Business Loan
Now that you’ve seen just how much a business loan can be beneficial to you, let’s take a brief look at 5 things that you should ask before applying for one.
1. What are your requirements?
This is by far the most important question that you should ask yourself before going ahead with a business loan. Properly recognizing and assessing the requirements of your business is extremely crucial since it can help you accurately arrive at the loan amount that you need to avail. And once you’ve arrived at the figure, the next step should obviously be the tenure over which you wish to repay the loan.
2. What is the interest rate?
This is another major question that you must ask before proceeding to apply for a business loan. The business loan interest rate is one of the most influential factors that help determine the Equated Monthly Installment (EMI) that you’re required to pay. The higher the interest rate, the higher your EMIs are likely to be. Therefore, it is advisable to first check the interest rates on offer from multiple loan providers before going ahead with a business loan.
3. What requirements should I meet to avail a business loan?
The eligibility criteria and requirements that a borrower has to meet varies from one loan provider to another. Also, the documents that you need to submit may also be different as well. So, knowing what requirements you would need to fulfill beforehand can put you in a better position to avail a business loan.
4. What kind of a loan am I looking for?
Business loans can be both secured or unsecured. Secured business loans require you to pledge assets to avail the loan, whereas unsecured business loans don’t. However, the interest rates on secured business loans tend to be lower than that of unsecured business loans. Therefore, determining the kind of loan that you wish to opt for – secured or unsecured, is something that has to be done before you apply for a business loan.
5. How is my credit history?
Some lenders require you to submit your and your business’ credit history and scores to avail a business loan. That’s not all. The interest rates that they charge may also be dependent on these metrics. Therefore, it is important to have a good credit score and history. If you find that your credit history is less than ideal, it is advisable to take measures to set it right before applying for a business loan. This way, you can increase the chances of getting it approved.
Only when you’re satisfied with the answers to all of the above 5 questions, should you ever proceed to apply for a business loan. And when you do decide to get yourself one, make sure to use the Finserv MARKETS app. You can find customizable business loan offers from a wide range of lenders all in one place. That’s not all. You can even apply for the loan right from the app itself. So go ahead and check out the Finserv MARKETS app right now.