Ways To Secure An Instant Loan For Your Business

29 March, 2024

Businesses may sometimes require external funding for various expenditures, including working capital or operation costs. With a business loan, you can cover all such costs, and others. Like any other loan, you need to meet the lender’s eligibility criteria in order to secure a Business Loan. In this article, we’ve put together tips to get an instant loan for your business.

Five tips to get an instant loan 

The following are essential tips for getting an instant loan online to meet your capital requirements:

1. Improve your business credit score 
   
   Credit score is a numerical indication of the entity’s debt repayment habits. A credit information company computes the credit score by assessing your business’ financial information. A good credit score increases your chances of securing a business loan. Thus, you need to improve your credit score if is low. If you’re using a business Credit Card, ensure you pay the Credit Card bills on time. Also, ensure you repay your ongoing debts on time. If you default on your repayments, it can negatively impact your business’s credit score.
   
   

2. Show a positive cash flow
   
   Lenders need to know whether your business is capable to repay the Business Loan. A strong cash flow means there’s a high probability that you won’t default on your payments. Also, a strong cash flow is an indicator of a thriving business. When the amount of your business expenses is more than your income, the cash flow is said to be negative. It is important for small businesses to maintain a positive cash flow to secure financing from banks. A positive cash flow can be achieved with steady revenue. To ensure a steady revenue, you must build a large and strong customer base, increase your profits and better manage your expenses.
   
   

3. Choose the right loan amount
   
   An important tip for getting an instant loan is to avoid borrowing more than what is needed. You should select a loan amount that you can pay back. This will help you pay your equated monthly instalments (EMIs) on time. It is important that you compute the exact capital requirements so that you’re not borrowing less or more. While borrowing a lower amount can increase your chances of securing a loan, you may not be able to meet your financial needs. Preparing a budget can help you select the right loan amount.
   
   

4. Close previous debts
   
   Typically, if you have an ongoing debt, there’s less room for undertaking another debt. Lenders usually consider the debt-to-income (DTI) ratio when approving loans. The debt-to-income ratio is the percentage you get when you divide your monthly debt payments by the monthly income. A higher DTI means your debts are more than your income can afford. Therefore, in order to secure a loan, you should strive for a lower DTI. You can get a lower DTI by closing as many existing debts as possible. Another way to lower your DTI is by increasing your income, which is possible if you can increase your business revenue.
   
   

5. Compare lenders
   
   The eligibility criteria, loan process, interest rate offerings, fees and charges, etc., can vary across lenders. You can usually find such information on the lender’s website easily. You need to compare lenders and find the one that closely suits your business needs. However, you must avoid multiple loan applications at once at it makes you a credit hungry customer, and this does not bode well with the lender.
   
   

Finance your business needs with HDFC Bank SmartHub Vyapar 

HDFC Bank SmartHub Vyapar offers various features and benefits that can help you grow your business. You can enjoy collateral-free loans of up to ₹35 lakh. For pre-approved customers, the loan amount is disbursed instantly. You can also get a loan against your Credit Card for up to ₹5 lakh. With SmartHub Vyapar’s overdraft facility, you only have to pay interest on the utilised amount.

Grow your business with stress-free financing with SmartHub Vyapar’s instant loans.

*Terms and conditions apply. The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances.