Before your business loan application is approved there are some steps to be followed. Nearly all of the business loan lenders who operate in India follow the same steps, so it is a good idea to educate you about them so that the approval of your business loan can proceed quickly. Here is the procedure
First you should do a little research on what type of business loan you want to get. This way you will have an idea of how much you need to borrow as well as knowing if you can actually afford the loan.
Next if you do some research on all of the lenders and loan products on the market you will be able to find one that suits your requirements.
The next step is to either apply for the business loan online, in person at your bank’s branch or over the phone. You will be required at this stage to provide business information about yourself.
Next step is to provide the bank with the required documents asked by them, make sure you provide no false information to them as provide with false information may lead to you being declared fraud or even Blacklisted.
Next the bank will check your credit history with CIBIL. This is done to check if you have a failed loan or a bad credit card payment in the past or a loan defaulter. If you come clean from there then you are most likely to get your loan approved.
After that the bank will give a financial visit to you personally or through any other mean.
After the verification process, the final step in the loan approval process is to actually sign and return the loan application form/format/letter to the finance company.
After this your loan will be approved and the money will be transferred to your account.
Reasons for Rejection of Business Loan application
- Reasons for a loan application to be rejected may be: –
- You have a bad credit history.
- Your business is classified as unstable.
- Your current income is insufficient to be able to make the loan repayments.
- You already have too many loans and your debt level is too high.
- If you have filed for bankruptcy before then you may not be approved.
Time taken for Business Loan Approval
You will find that in India approval of a business loan can take a few days. In some rare cases you may even be able to get instant business loan approval. Actually, the time that it takes to get approval will depend on how complete the information that you provide is and whether or not that information places you in a high or low risk category. Generally, the lender will put the money into your loan account within a day or two after your business loan is approved and signed.