By admin | September 28, 2021
If you own a business, you must be ready to access additional funds through secured business loans whenever required. These are judged by pre-determined criteria formed by lenders and conclude your eligibility to get one. These criteria are based on a variety of factors, aligned to your business decision. Let’s take a look at the four most important ones.
The primary factor that lenders look into first while checking your eligibility, is your CIBIL Score. This helps lenders to glimpse over your previous borrowing patterns through your credit history. While on-time payments help increase your CIBIL Score, delayed repayments will result in its decrease. A score of 750 and above, most often helps increase your eligibility. Even though having a good CIBIL Score is crucial, there are still other factors that can affect your chances of getting a business loan.
Your business’ past performance is another vital component that a lender looks into, as it is an indicator of on-time loan repayment. Balance sheets, bank statements, and tax returns are some of the core evaluators of your business performance. Your eligibility could be adversely affected if the balance sheet shows any discrepancies in your yearly revenues.
Age of Your Business
Business vintage also plays an important role in your eligibility for a business loan. The general rule of thumb is, any businesses which have completed less than 2 years of operations, are usually not provided business loans. Financial stability can be vouched for by companies that have completed a few years, through documents such as ITRs, Bank statements, and balance sheets.
Most lenders prefer providing loans to businesses that offer some kind of collateral, to decrease the risk associated with lending funds. Your eligibility will significantly increase if you can offer it to a lender.
Electronica Finance Ltd (EFL), a leader in machine and business financing for 30 years, offers business loans with flexible repayment options and attractive interest rates. EFL judges your eligibility through a detailed assessment of your business, instead of depending on just paperwork. It is the only NBFC to offer loan against used machines which can be used for working capital and business expansion.
To summarise, while you can always increase your business loan eligibility by rigorously following the above-mentioned factors, EFL is always by your side, to empower your ambitions in all situations.