How to Secure a Long Term Business Loan?

How to Secure a Long Term Business Loan?

A long term business loan can help you achieve your dreams that you have seen for your company since its inception. With up to 8 years of tenor, these are comparatively more comfortable to repay than short-term loans owing to their lower interest rates and greater time period for repayment.

Utilize this loan to improve your infrastructure, purchase plant and machinery, or use it as the working capital.

Banks and NBFCs are the primary sources that can provide you with a long-term loan. However, NBFCs lead the race when it comes to features and advantages. With offers like the Flexi loan facility and easy documentation, they cater to your business needs with more flexibility.

Bajaj Finserv is one such financial institution that takes it upon them to deliver tailor-made long-term loans to businesses. Head over to their website and apply for a loan today!

But, before you do that, it is crucial to ensure you fulfil some requirements for that loan.

For securing a long-term loan, you will need the following:

  1. A business with a satisfactory vintage

More the vintage your business has, more will be the eligibility for a long-term loan. NBFCs generally look for a company that spent at least 3 years in the market.

With 3 years or more experience, your business would automatically attract several financial institutions for a long term business loan.

  1. Sound business plan and financials

Sound future projections and profitability calculations can convince the lenders about your credibility and help you secure a long-term loan more easily. Lenders will easily determine whether you have the intention and capacity to repay the loan amount or not.

But, make sure your business can perform, so it pays off the debt from your lenders!

  1. Business and personal income tax returns

Income tax return files will play a vital role while approaching a financial institution for a long-term loan.

The importance of IT returns?

Reading your IT return files, lenders get to know about your income sources and whether you abide by legal matters.

This will further enable your lenders to judge your credibility and whether you can repay the long term business loan in due time or not.

  1. A worthy credit score

When you apply for a long-term loan, the first thing that NBFC’s check credit score.

The credit score displays your credit history and how efficient it is. Lenders will want you to have a credit score around or more than 750; this ensures you maintain a satisfactory track record of your past loans and credit cards.

  1. Profit & Loss statement

The Profit & Loss statement will display the net income of your business. A sound P&L statement will ensure you have stable cash flow and healthy mode of operations.

With such a statement, you will up your chances of getting a long-term loan even more!

  1. Balance sheet

Amongst one of the current requirements of NBFCs – your business’s balance sheet matters!

The balance sheet will display all the current assets and liabilities that your business incorporates. This will showcase what you presently have in your inventory and what you owe to your debtors.

More assets and fewer liabilities enable you to get the loan sanctioned quickly!

  1. Bank statements

Last but not the least, bank statements provide an insight into the how much cash you currently have in flow. These statements contribute considerably in making your loan sanctioning effortless.

Whenever you are ready with all the requirements mentioned above, approach an NBFC and get your long term business loan. Transparent processes from such institutions can make the entire process simpler and faster.

 

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