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Top 8 Financial Habits to Help You Get a Business Loan Easily

Clix January 15, 2021


Several businesses end up shutting shop every year due to lack of financial options. Although there are business loans available for financial support, a large percentage of loan applications are rejected outright. Most of the time, the reason for loan rejection is the business’ ineligibility to be approved for a loan.




As compared to banks, NBFCs like Clix Capital have easier loan application and approval procedures. Still, the NBFCs base your loan approval on several factors that include your credit score, payment history, financial condition, and repayment capacity. Even if you don’t need a business loan any time soon, you must follow some healthy financial habits to improve your creditworthiness to be ready for the uncertainties that future brings.

You can use the loan as an extra source of funds to finance your inventory, equipment, machinery, manpower, working capital, and other requirements to ensure smooth business operations. A few financial habits can prepare you well for the upcoming loan application. Let’s have a look at these practices that can help you get a business loan approval easily.

Manage Efficient Cash Flow

To ensure business success, it is advisable to manage any payments for services rendered in a planned manner. Delay in receiving payments or rendering services can negatively affect your working capital. You may consider revising the payment procedures for your clients and perform a credit check on your clients. This way, you can choose only those clients who make their full payments in time. Similarly, make payments to your clients on time as well.

Maintain and Improve Credit Rating

You can improve your credit score by paying your EMIs and bills on time. Your business’ and your credit ratings can have a great impact on your business growth and stability. Lenders approve or reject your business loan application considering credit score as primary factors. The most important way to improve your credit rating is to make your payments on time. As long as you are consistent with your payments on any credit instrument, you can retain a good score and pose yourself as a creditworthy business loan applicant.

Keep a Gap Between Personal and Professional Expenses

Business owners must keep separate accounts for their personal and professional finances. Its advisable not to use your business funds to meet personal needs, even if you intend to deposit it back in the end. Spending business funds for personal purposes may not bring any profit and it will only be considered as an expenditure and throttle cash flow for the business.

Keep Your Documents Updated

In addition to the online loan application form and a recent passport size photograph, NBFCs also need to verify your address, identity, financial documents, and proof of ownership.

    • Identity proof – Aadhaar card, PAN card, or Government ID for government employees
    • Address proof – Aadhaar card, voter ID, passport, driving license, or last 2 months’ utility bills
    • Financial documents include PAN card, GSTIN, 6 months bank statement, recent income tax return form, income computation, audited balance sheet, profit and loss account for the last 2 years, proof of business continuity for the last 3 years, such as trade license, sales tax certificate, ITR, establishment, etc.
    • Proof of ownership include the applicant’s name, or the applicant’s parent or spouse

Any lender you approach will request these documents to verify before approving your business loan application. These documents prove your credibility as a money borrower and add strength to your application when you apply for a business loan. So, it is important to keep these documents updated regularly.

Some of the best habits to follow include filing your ITR every year, getting your licenses renewed on time, paying your income tax regularly, and others. Make these steps a regular part of your business routine, as they will save you from any last-minute hassle during the loan application process.

Never Let Your Credit Card Debt Pile Up

Many business owners make the mistake of paying for an entire range of business supplies using their credit cards, such as computers, inventory, furniture, etc. It’s fine if you pay off your credit card bill quickly, but if these debts stay on your credit report for long, your credit score will go down significantly and can affect your credibility to a great extent.

So, avoid depending on your credit card to meet your business expenses. Use it only when you are confident that you can pay it off quickly.

Stay Updated with Your Loan Repayments

If you already have a personal or business loan, then paying its EMIs on time is a great way to show your credibility to the lender. Failing to manage your present loan will only invite rejection for a new loan application. Poor loan management will not only ruin your credit rating but also place you in severe financial jeopardy. No lender will approve your loan. Even if someone does, you will have to pay a huge interest rate for it.

So, stay updated with your loan repayments, which will give an impression that you can handle more debt and the lender will find no reason to reject your application.

Spend Your Earnings Wisely

Your business is running well and making profits, but that shouldn’t be taken as a sign to spend the earnings swiftly. To put it simply, avoid spending on items that you and your business do not really need. Keep a fixed portion of your income aside every month to create a fund for emergencies. By keeping a balance between your savings and expenses, you will build a working capital over time that you may use when the need arises.

Don’t Take Decisions on Impulse

Making rash and impulsive decisions can be detrimental to your business and may leave you in a financial crunch. A single bad decision can leave you locked in a never-ending cycle of debts. Give your business a strong foundation with sound decision-making. Even while accepting a loan plan, use the business loan EMI calculator to calculate the EMIs and choose a plan keeping your  repayment capacity in mind.

These financial habits can help you cultivate a healthy credit rating by ensuring a smooth cash flow and keeping you away from unwanted financial emergencies.

Apply for a business loan at Clix Capital and avail of our easy application and approval process.

For any queries, find us on Facebook, Instagram, Linkedin, Twitter, or Whatsapp

You can also reach out to us at or call us at 1800 200 9898

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