Eligibility and Documents for a Commercial Loan
A commercial loan is a common form of borrowing in the country. The loan is usually short term finance that is offered to businesses to meet their operation costs and capital expenditures. A business goes through various stages where it needs funds to grow and expand. This is when it is time to apply for a loan. A progressing business has many expenses and a loan will be an ideal source to support the business and to take it to its potential.
Usage of the loan
Commercial loans have transformed with time and they not only fulfill the short term financial needs of the business but also help meet the long term goals. Whether it is to meet the day to day expenses of the business or to invest heavily in business technology, the loan will help meet every type of business need. It is important to remember that the loan should be repaid within the flexible tenure. It is an unsecured form of financing which is offered with a flexible repayment op-tion and a low rate of interest.
Eligibility for the loan
You can be a partnership firm, a private limited company, a proprietorship, and a public limited company to apply for the loan. The loan application process is simple and hassle-free. Once you identify the purpose of borrowing and decide how you intend to use the funds, you can apply for the loan. Different lenders may have varying eligibility criteria with regard to the turnover and profit of the business. You can compare the same online and then make the application. It is important to have the business in existence for at least a period of five years and it should be a profitable business.
When you are ready to make an application, you simply need to fill the application form and submit documents as listed below:
• PAN of the directors and the company,
• Annual statements including the income statement, balance sheet, and cash flow statement,
• GST returns, if applicable,
• Bank statements for the last six months,
• Proof of going concern of the business,
• ITR of the directors and the company,
• Copy of registration papers of the company,
• Articles of Association and Memorandum of Association.
• Projected income statement and balance sheet of the company.
You need to have adequate cash flow to make the loan repayment on time and the lender will look into it before approving the application. Strong cash flow shows that you will not default in the repayment. The firm should be making profits and is expected to make profits in the specified time frame. If you have a good credit score, the loan application will be approved in no time and you will get access to funds.
Prepare a repayment schedule to ensure timely repayment of the commercial loan. The EMI calculator is an ideal tool to help you with the same. The calculator is available for free and is simple to use. You only need to provide the loan amount and tenure to get a quick estimate. Consider the monthly inflows and outflows of the business before you agree on an EMI amount. Timely payment of dues will make it easier for you to get access to loans in the future as it has a direct impact on the credit score. The loan will help take your business to new heights and will turn your aspirations into reality. Do not rush through the borrowing decision. Take your time and compare the interest rate offered by different lenders before you sign on the dotted line. Understand the terms and conditions of the loan thoroughly before you accept the loan.
Similar Articles
When you're looking for an installment loan, finding the right provider is crucial. With so many loan options available, it can be tough to make the best choice. So, how can you ensure you select the right provider for your needs?
Are you struggling to keep up with payday loan payments? Do high interest rates and fees make it seem impossible to get ahead? You're not alone. Many people find themselves trapped in a cycle of debt, but there are effective solutions.
Within the financial domain, payday advance loans have gained traction, accompanied by both acclaim and contention. Frequently, these loans are linked with the requirement for credit checks, a procedure that many borrowers find daunting
You can get a personal loan if you can boost your credit score. Several ways to increase your credit rating include checking your credit reports for mistakes and maintaining sound financial habits. This article will provide you with information on how to improve your credit score.
It's that time of year when the family starts to plan their summer holidays. If you're like most people, you'll want to take your caravan with you to make the most of your trip. But before you start packing, you'll need to make sure you have a Caravan Loan in place.
You might have heard the term “payday loans” before, but never really knew what that meant. Payday loans have roots that date back more than a century.
Personal loans are one of the most flexible forms of raising funds as these loans do not come with any kind of restriction on their usage. Whether you have to pay for the medical bills or you wish to go on a world tour, the borrowers have complete freedom to use the personal loans for almost any purpose they wish to
A personal loan is the first thing that comes to mind when we are in need of funds. The loan serves all purposes and helps meet personal needs, whether it is for home renovation or to meet an emergency medical expense.
Buying a two-wheeler is a matter of pride and passion. Most of us dream about buying a two-wheeler right from the day we start to earn. Two-wheelers do not come cheap and with the latest features and technology, they have become pricier. Manufacturers introduce new models from time to time and it can become difficult to take a pick.