6 Things You Need to Know About Getting Fast Business Loans Online

Every business, irrespective of size or the sector it operates in, requires capital from time to time for meeting its day-to-day requirements or for long-term expansion. While some companies look for equity capital, either from founders or external investors, most rely on borrowings from banks and non-banking finance companies.

However, getting a business loan quickly, whether secured or unsecured, can be a challenge, especially for micro, small and medium-sized enterprises (MSMEs). The situation has improved in recent years though, as most banks and NBFCs started offering business loans via their apps and websites to quicken the approval and disbursement process.

The emergence of financial technology, or fintech, start-ups has further intensified competition, prompting traditional banks and NBFCs to catch up and making it easier for prospective borrowers to secure loans quickly.

Indeed, technological advancements in mapping property records, e-signatures, and e-verification of documents have benefitted lenders and borrowers alike.

Benefits Of Online Business Loans

Taking a business loan online is a convenient option that spares one from the tiresome process of going to a lender’s branch to fill up a loan application. Here are some benefits of online business loans:

• A prospective borrower can apply for a business loan at any time and from anywhere.
• An online loan helps the borrower avoid the hassle of physical submission of documents.
• Loan processing is faster. Most lenders approve the loan within 24 hours and disburse it in two-three days.
• An online business loan provides the business owners the flexibility to quickly choose the loan amount and the loan tenor, depending upon their eligibility.
• Online platforms use algorithms to evaluate the eligibility of borrowers in double quick time.

Important Things To Know For Fast Business Loans Online

A prospective borrower must keep in mind a few things to secure a business loan online as quickly as possible.

1. A Duly Filled Loan Application:

No lender would consider an incomplete loan application. No matter how tedious it may appear, the loan application form must be complete. This is more important in the case of an online loan since human intervention is limited. Also, it must furnish only correct details as any wrong information can delay the process and may even lead to loan rejection.

2. Documents Required:

There is a list of documents that every lender checks while processing a loan. These documents help the lenders verify the personal and financial information of an applicant.

3. A Strong Business Plan:

An exhaustive business plan highlighting the company’s goals and utilization of the funds to achieve it can help convince lenders to approve the loan. On the other hand, the lack of a plan or an unrealistic plan may prompt lenders to deny the loan.

4. Repayment Capacity:

Borrowing can be good only if one is capable of repaying the debt. Lenders review a company’s assets, financial documents like sales, projections, and credit history to decide if an applicant will be able to pay back the loan within the loan tenor.

5. Compare Loan Terms:

A difference in the interest rate by a few decimals can make a big difference. Applicants can crosscheck and compare the loan terms and interest rates online.

6. Personal Guarantee:

Some business loans, especially collateral-free MSME business loans, may require personal guarantee. It is an applicant’s promise to repay the loan if their business can’t.

Loan Documentation

The lists of documents for both secured and unsecured business loans are quite similar with slight variations.

• An address proof, both of the business owner and the actual location of the business.
• An identity proof like the driving license, passport, PAN card, Aadhaar card or Voter ID is necessary for lenders to verify if an applicant is a permanent resident of the country and is above 18 years of age.
• A bank statement of the previous 6 to 12 months to confirm if the mentioned bank account is valid.
• Financial statements like income tax statements, balance sheet, profit and loss account of the business.
• Some banks require proof of continuation. It can be an ITR, trade license or sales tax certificate.
• Other mandatory documents like GST registration number and GST returns.
• Unsecured loans may require additional documents like details of existing loans, if any, partnership deed, memorandum of association of the company and certificate of incorporation.

Conclusion

Conventional banking can be tiresome and time-consuming. But technology has dramatically changed every sphere of life and the financial services sector is not an exception, and many people now prefer online banking.

In online business loans, applicants need not wait for the lender’s operating hours or visit a branch. They can apply for fast business loans online even on a public holiday, and from anywhere. But all the required documentation must be in place before starting the loan application process.

IIFL Finance offers loans to businesses of all sizes and across sectors. It offers a fully online approval process for MSME business loans at competitive interest rates.

Borrowers can even reach out to IIFL Finance through WhatsApp, text messages, phone banking and web chat, and a company representative will guide them on taking a business loan quickly and without any hassle.