As a young entrepreneur, you must be well aware that branding and marketing are competencies that are crucial to running a business. However, what is most crucial to carry out smooth business operations is a consistent cash flow. Securing the right amount of finance can be very helpful in making your entrepreneurial aspirations a reality.
Being a hub for micro, small and medium-sized firms, there is a lot of demand for small business loans that can help businesspersons all across. MSME or Micro-small-and-Medium-enterprise loans have been designed to provide much-needed support to young entrepreneurs. After all, MSMEs not only employ a major chunk of the young population but also make up a hefty part of the growing economy. Read on to see how you can make the most of an MSME business loan and how to go ahead with the MSME loan apply process.
- Do an eligibility check before applying
Before you submit your business loan application, you need to verify if you qualify for it. Get in touch with your preferred lender and check all the criteria before you apply. Things might be easier if you are planning for an MSME loan apply online, as then you can easily make the inquiries online. Your age, business aspirations, age of your business, income tax returns, bank statements, and CIBIL score make up different aspects of the MSME loan eligibility criteria. They will all be checked and verified by the lender.
Pro Tip: In case your CIBIL score is less than 650, it is recommended that you wait for a while and try to improve it. A low CIBIL score can be a reason for loan application rejection.
- Make your paperwork foolproof
Your paperwork will also play a key role in loan approval, so make sure it is proper. Most lenders have a set of documents that they need, but make sure you go through your lender’s requirements. Documents such as IT returns, GST returns, licenses, safety standard certificates, Aadhaar Card, your and your firm’s PAN, etc should be in order.
Pro Tip: When you apply for an MSME loan, you will submit your business plan. Try to put your best foot forward, so that your application becomes a compelling package.
- A detailed comparison will go a long way
When you are out to seek a business loan, you will come across a plethora of options. Before you make a decision it is advised that you do your research and compare the lenders. Explore all the options, compare the rates of interest they offer, the charges, the services, and an overall review of the lender company.
- Prepare a repayment strategy before you take a loan
Probably one of the most crucial parts of taking a loan is the repayment. Make sure you have the proper repayment strategy before you enter an agreement. Accessibility to an MSME business loan can indeed be tempting, but avoid the temptation unless you are sure you will be able to pay back the loan comfortably. Choose the loan amount, payment tenure and the EMI carefully.
Let’s Wrap It Up
In the recent past, many young entrepreneurs have been able to bring remarkable transformations in the Indian business sector. Indian unicorns and decacorns have garnered not just attention but billions of dollars of funding. If you too wish to join the young entrepreneur brigade, reach out and apply for an MSME loan for new business. Follow these tips, do your homework and make a well-informed decision.
