A small business loan can help you grow your business. You can use it to expand your workplace, build working capital, buy inventory, improve machinery and equipment, hire skilled labor, or any other purpose you may deem fit for operations or expansion of your business. However, business loans from banks usually have stringent qualification criteria and may don’t always offer a hassle free experience. That’s why many business owners prefer NBFCs for a small business loan to meet their financial needs without much ado.
The small business loan application process in most NBFCs tends to be simple and quick, you can get your loan with easy eligibility conditions and minimal documentation requirements. The entire application process can be completed online from the comfort of your home or office. We are sharing a five step guide that can help you grab the funds your need for your business without much hassle.
Step #1: Determine If You Are Eligible for an SME Loan
Answer the following questions to determine if you qualify for a small business loan or not:
- What is your credit score?
You can check your credit score for free here. Most lenders, including Clix Capital, prefer borrowers with a credit score of 700 or above. If your credit score is less than that, follow these tips to improve it first and then apply for a loan. Applying for a loan with a low credit score leads to straightforward rejection and will result in further reduction in the credit score.
- How old is your business?
Lenders give due attention to the duration for which you have been in the business. To qualify for an SME loan with Clix Capital, you must have a business vintage of at least three years.
- How much money does your business make?
As a basic eligibility criteria, lenders ask for a minimal annual turnover. For Clix Capital, it is ₹ 1 Crore. Calculate your business revenue and determine if it is enough to meet the lender’s requirement before applying.
- Can you afford loan EMI repayments?
Have a look at your business financials, particularly cash flow, and determine how much EMI amount you can afford each month. You may use a business loan EMI calculator to adjust your loan term as per your repayment capacity.
Step #2: Be sure about the objective of the loan
You have to be sure of the objective and the reason to go for a loan. There are different types of business loans available to SME’s. Clix Capital offers two types of small business loans:
- Term Loan: You may apply for this type of small business loan to cover your high-cost expenditure such as funds for new machinery and equipment purchase or business expansion.
- Working Capital Loan: You may take this small business loan to finance your regular business expenditures or for smooth operation.
Step #3: Research and Compare Prospective Lenders
You will find several lenders out there offering small business loans, but one might be better than the others in certain aspects appropriate for your financial needs. Make sure to research and compare the lenders, you can base your choice on on several factors, including their interest rate, loan amount, repayment terms, fees & charges, eligibility conditions, documents required, and customer service.
Step #4: Gather the Required Documents
Before applying for a loan, ensure that you have all the documents needed by the lender. Having them easily accessible will streamline your business loan application process and may result in faster loan approval. For a Clix Capital Business Loan, you have to submit the following documents:
- Completed loan application form
- Passport size photograph
- Identity Proof, which may be your Aadhaar Card, PAN Card, or government ID if you are a government employee
- Address Proof, which can be your Aadhaar Card, passport, driving license, voter ID card, or utility bills for the last 2 months
- Proof of Ownership
- Financial Documents, which include the following:
- PAN Card for a firm, company, or individual
- 6-months bank statement
- Copy of the most recent Income Tax Return form
- Computation of income, audited balance sheet, and profit & loss account for the last 2 years
- Proof of continuity of the business of 3 years, which can be your sales tax certificate, establishment, ITR, or trade license
Step #5: Apply for the Loan
Now that you are ready with everything, it’s time to go about the actual loan application process. Once you have shortlisted a few lenders based on the factors mentioned above, visit the lender’s website and follow the on-screen instructions to complete the application process.
To apply for Clix Capital SME Loan, you have to click on the Apply Now button and our customer representative will get in touch with you to share next steps.
You can also reach out to us at email@example.com or call us at 1800 200 9898
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