A business loan helps the business owners to turn their dream of business ownership into a reality. Most of the lenders in the market offer the business loan to provide necessary funds to the businessmen. However, when you finalize your decision to “Apply For Business Loan“ which helps you to get business off the ground but it has certain drawbacks which we have mentioned below:

Weary Application Process: A business loan has a tedious application process with lots of complexities as compared to other loans. Every lender checks and validates each and every required document that business person puts in application. The lender judges your loan eligibility whether you are eligible or not for business loan which could be an extensive process.

Chances of Rejection: Every lender imposes strict rules and conditions on the business loan approval. Not all the businesses will meet the eligibility criteria fixed by the lending institution. It is always good to know how lender analyze your application before sanctioning you a loan.

Don’t waste your time in application if there are no chances of it being accepted d dealing with rejection can be difficult and left you wondering, where you should go ahead to get funds for your business needs.

Collateral: Every lending institution requires some form of asset as a security before lending you the loan money. Hence, you have to put any of your personal assets at risk if your purpose doesn’t get fulfilled. You may face the possibility of losing not only your business but also the asset you pledged for loan.

High Interest rate: The rate of interest on business loan can be very high which can defer your business development and growth as your business needs to gain profit from the loan money and manage the cost of high interest rate. Moreover, this extra cost makes it difficult to plan other sound financial strategies.

Credit Score: Some of the lending institutions will let you peek at the loan money depending upon the rate of your credit report. Whether you “Apply For Business Loan Online“ or offline, you have to permit the lender to access your credit report and it will always drop your score by few points.

Applying the loan with multiple lenders put your creditworthiness in a worse place than you applied it for first time. If you want to secure a bigger loan quantum, you have to maintain a good credit score by being regular in your repayments and shedding off the debt load.

Loan Approval: Above mentioned factors wouldn’t be an accurate list of setbacks but it’s hard to get a business loan in some instances. Few lenders offer shorter and streamlined ways to get required finances but renowned lenders still ask the business owner to submit a lot of financial paperwork, tax returns as well as marketing plan to get into the door.

It can be almost impossible for new venture to get a business loan as lenders ask for the profit records of last two or three years. Therefore, start ups choose to look for other methods of funding.

With COVID-19 restrictions changing daily, every business person is under great deal of stress by disruptions in supply, lower cash flows and increasing overhead costs. Nowadays, many lenders are offering secured and unsecured business loans to keep your business healthy as well as help you to provide the customers, a quality services and products. Being a new business person, when you don’t have much of assets to pledge for loan, you can also “Apply For Business Loan“ without collateral.

Yes, such loans are called unsecured business loans especially for those who don’t have any assets to offer as collateral. It could be great if your firm is growing and you require funding to cover new costs. Collateral is a main difference between secured and unsecured business loan which have a great impact on loan terms which we will discuss in detail.

→ Loan Amount: As there is no requirement of security, the loan amounts sanctioned by lenders are small for unsecured business loans as there is more risk involved to default on payments where as secured loans will generate you a desired loan quantum.

→ Loan Tenure: Unsecured loans are always offered for a short tenure as compared to secured business loans. As there is more risk involved for lender to recover the loan money but if your repay the loan as per predetermined EMI schedule, you can secure other loan for longer tenure easily because of your trustworthy business.

→ Interest rate: Most of the lenders charge higher interest rate for an unsecured business loan than a secured one. Providing a lender with no security makes you more vulnerable to loss in case of default, for which they charge high rates to compensate for that.

There are some advantages linked to unsecured business loans which are mentioned below:

→ No collateral: A secured business loan always demands for some form of collateral but in unsecured loan, one does not require collateral. It means even if you default in case of such loan, one does not risk losing any security to the lender.

→ A chance to grow: If you don’t have any asset to provide a lender, it should prove as a barrier for your business. Therefore, unsecured business loans are great way to build a good credit score as well as these loans have shorter tenure, one can borrow small quantum, repay them quick and can secure another business loan qualifying you with larger loan amounts.

→ Quick processing: The loan processing and disbursal time for unsecured business loan is less as lender does not have to spend time in verifying the value and legitimacy of the asset you offer them. These business loans generally require minimal documentation which reduces its processing time. If you have a good credit history, strong business plan and business documents in hands, you can easily process a business loan within few days.

If you want to “Apply For Business Loan Online“ or offline, start your unsecured business loan application with ShubhBank today. You will experience a zero hassle and zero hidden charges on our business loans.

Securing a loan for your business is not an easy task but when the much needed funds are disbursed to you, you are able to recruit new employees, get your old machinery repaired, and purchase new equipment to keep your business operations running efficiently. However your journey while you “Apply For Business Loan“ is not easy as a walk in the park as it involves few hurdles but you can tide over them with a bit of guidance.

In this article, we will guide you about some of the obstacles that may come across while availing a business loan which are listed below:

Unable to meet collateral requirement: A business loan is a secured type of loan where most of the lenders ask for collateral against loan money. This is one of the major roadblocks in taking business loan especially for micro scale businesses as they don’t have much security to pledge. So, it is better to find a lender who offers collateral free loan where you can secure the funds without putting your assets on the line.

Unsuitable credit score: A credit score is one of the key factors to get through eligibility criteria that lenders will check to determine your creditworthiness and repayment capability. Thus, without a good credit score, lender may reject your loan application. This issue is common amongst small scale businesses and new enterprises as they have very little or no credit history. One cannot build a good CIBIL overnight, so layout a robust business strategy to convince the lender about your repayment ability.

Inconsistent cash flow: Every lender favors the loan applicants with a constant cash flow because it reflects your business health whereas lenders view uncertain cash cycles or inconstant revenue streams poorly. Therefore, try to optimize your cash flow before taking a business loan. It is advisable to keep your financial records and income statements duly updated to maintain a spotless profile. You can approach ShubhBank to “Apply For Business Loan Online“ or offline that requires a decent credit score.

Existing debt: If you have a pre-existing loan, lenders may not review your loan application positively. This is very common scenario for any enterprises with pre-existing loan as it reflects a high debt-to-income ratio which is a comparison of your total monthly installments to your total monthly income. There is not particular DTI ratio but the lower it is, the better it is. Make sure to pay back your existing loans timely which help you to build your credit score to enhance your loan eligibility.

If you really want to avoid such hurdles and quickly want your business loan to get approved for your requirements then avail a business financing from ShubhBank. We provide both secured and unsecured type of business loan solutions at competitive rates of interest, minimal documentation and flexible repayment period for maximum convenience. You can also use the loan EMI calculator to check your repayment potential. Visit us for business loan as it can be the key to the growth of your company.

In recent times, COVID-19 outbreak has changed everything terribly, from being quarantined and work from home, online classes to online shopping, making all this new normal for whole population. The corona virus pandemic has brought most of the countries to a complete stand-still, where everyone is going through a tough financial condition. Therefore, global economy has been fallen into the pit of recessions, these days. Thus, businesses are no less which have suffered the consequences of poor customer demand, fluctuation in supply and now have to face the adverse effects of this recession and on the way to restore their production to the supply chain.

So, all these prevailing conditions have put the most of businesses to look for funding options so that they can get back to the previous track. In India, one of the major business funding options, business loans are the popular one as many business persons go for it. Before you “Apply For Business Loan“ one of the most important things which a loan borrower should know is about the tax benefits on business loan. Availing any of the tax exemptions on your business loan can reduce your loan burden; let’s know in details about the tax benefit on business loan.

Interest rate is tax deductible on business loan: The rate of interest on business loan varies from lender to lender, where the loan money is categorized as an expense as it is being utilized in fulfilling business needs. Hence, the rate of interest paid to repay the loan quantum is claimed as tax-deductible expense. When the income tax is calculated on your business, then the interest rate paid is deducted from the gross income while the principal amount is never a tax deductible. Always try to maintain exact records of your business loan as if you are asked by the income tax department to submit the associated proofs.

Some other tax benefits on business loan
√ The interest amount on business loan is tax exempted.
√ The principal on business loan quantum is never tax deductible.
√ While filing your income tax, interest rate paid on business loan needs to be deducted from the gross earnings.
√ Usually, the tax liability is calculated by cutting down the business expenses from the gross business earnings.
√ One needs to fulfill the required eligibility criteria to avail the tax deduction on business loan.

You must remember while you “Apply For Business Loan Online“ or offline that it is a type of funding provided by any of the traditional lender or NBFC, so it cannot be counted in your income. Therefore, it is not tax-deductible. Generally, loans against business do not alter what one owes in taxes because according to Income Tax Act 1961, getting funds through borrowing isn’t the same as earning funds for the business. So, the interest rate levied of the loan against business is considered to be tax-deductible while the principal money is not tax-deductible. However, one can enjoy the tax benefits on business loan but there are some rules to be followed.

If you are planning to own a successful business or you want to grow your ongoing business, therefore, figuring out to start a profitable firm needs to raise the funds for your business product. There are number of reasons for which your needs funding such as need to purchase new machinery, pay wages to the employees, land purchase to set up the production unit, to buy an office or it can also be needed to expand the existing business or to consolidate the existing debt.

Initially, a business person need more funds to build up sales and one will need money to maintain the cash flow and to pay salaries. Now, the question arises where do you get these funds from? There is a large lending sector for potential business loans, these days. In our country, business plays a crucial role and contributes highly in the GDP of country. The small and medium businesses mainly contribute 95 percent of the industrial units in India. The demand of “Business Loan“ is increasing by each passing day. Hence, lending institutions are making it easier to apply for business loan and get instant funding.

In this article, we are providing you with some tips which will tell you, how to pick a right business loan for you:

⇒ Type of Loan: In lending sector, there are different kinds of business loans available which include term loan, working capital loan, business line of credit, equipment loan or small business loan. Therefore, to avail the maximum benefits, one first needs to decide which loan you require. If you need to upgrade the machinery, you can go with equipment loan and if you need to remunerate the employees or want to expand your existing business, you can avail a working capital loan. You can research and knowing your options will help you to opt for the best-suited scheme.

⇒ Right business loan lender: When you need to “Apply For Business Loan“ you will find innumerable lenders offering number of benefits. Many of the lenders approve and disburse the loan quantum easily whereas many of them take time to deliver the money. If you really want to grab the best option for yourself then do not trust any random lender easily. Finding the right lender may take some time so go through different lenders and compare the interest rates and read the customer reviews. Once you find the right lender, you can go ahead to take a loan.

⇒ Documentation: When you avail a business loan, the lender will ask about your cash flow to be sure about the repayment capacity. It is your responsibility to provide the correct details of everything to avoid the loan rejection. Try to find those lenders who have minimum set of eligibility criteria along with less paperwork.

Selecting a right business loan is very important for a particular business’s success. There are varieties of online lending platforms which will help you to assess the different business loans offered by various lenders. Selecting the right loan product can also add the growth to your business exponentially.