As a small business owner, there are so many things that you have to take care of that sometimes you might overlook the important factors and realise this error when it is too late, and the situation has become desperate. In such a situation, the usual reaction would be to panic and fret, but it is not going to do any good for your business. You are already slammed with so much work to handle that if you sit down for ruing your ill luck, you are going to make the situation worse. Ups and downs are an integral part of running a business and as a smart businessman you need to take it in your stride. Whatever situation you might be facing, it has a solution and that solution can only be worked out if you keep your calm and composure.
The biggest problem that you can face as a business owner is the lack of funds to take care of your expenses. You need to sell goods on credit to compete with the market but as a result your payments are going to come after 60-90 days but what about your immediate requirements? How are you going to meet them? You can not pressurise your customers too much as they might otherwise move to your competitors, in such a situation your best option is to avail a business loan at lowest interest rates. There are many financial institutions operating in the market who offer various types of MSME loans for small business owners to take care of different types of business expenses.
There are various types of financial institutions that offer business loan at lowest interest rates to business owners, such as private banks, public banks, NBFCs, and online lending companies. With the rising popularity of technology as well as business owners seeking convenience while looking for a business loan, online lending companies have emerged as the most popular alternative for business owners seeking MSME loans for their requirements. It is due to the numerous advantages that online lending companies enjoy over traditional lenders that this change has been visible.
About Online Lending Companies
Online lending companies are specialised financial institutions who conduct their operations through their websites and mobile platforms. They do not have any physical branches. They follow an efficient application system for a business loan, wherein you only have to provide the self-attested copies of your documents to submit your application. They follow a quick process to process the business loan application and take only a few working days to disburse the amount, if your profile meets their requirements.
Following are the salient features of an Online Lending Company:
- Maximum loan amount is up to Rs. 5 Lakhs, if your annual turnover is more than Rs. 10 lakhs.
- The rate of interest charged varies between 23% to 28% per annum.
- Maximum repayment tenor is 24 months.
- Option to foreclose the loan account without incurring any additional charges.
- Convenient application option through website or mobile app.
- Regular updates regarding the status of loan application.
How to get a Business Loan at Lowest Interest Rates?
One of the crucial aspects about applying for a business loan is the rate of interest being charged. The rate of interest decides the total interest cost you have to bear and a slight reduction of even 1% can also materialise into a lot of savings. It is therefore important for you to take all possible steps to look out for business loans at lowest interest rates. Here are some tips to help you get lowest interest rates against your business loan application:
- Credit Score: Make sure that your credit score is above 750. When your credit score is above 750, it shows your responsible behaviour as a borrower and reduces the risk factor for the lenders, who are willing to offer you lower interest rates just to get a customer like you.
- Research Around: There are many different lenders operating in the market with different loan offerings. Compare rate of interest offered by a few different lenders and apply for only that business loan which has the lowest APR (annual percentage rate).
- Excellent Repayment Track: If you are running any other loans, make sure that you repay all your EMIs on time to show your efficiency as a borrower and convince the lenders that there is no risk in lending the money to you.
- Credit Utilisation: Keep your credit card utilisation ratio below 40% of the total amount to enhance your eligibility for a low interest business loan.
Follow these tips to make sure that you get the unsecured business loan facility at lowest interest rates and can take your business to greater heights.