If you thought that only people who earn fat salaries and are financially secure, are the ones who are eligible to a loan by financial institutions, then its time you change your perspective. Although it is true that, just by presenting their bank account statement, they will be entitled to hassle free loan availing process, but it does not stop you to avail a loan to flourish your business activities.
The only that you need to try hard is to convince your lender as to how good your business is and how it has the potential to grow more with their finances. Apart from these there are certain steps you need to go about:
Documents required:
- Ensure that your income proofs are in order.
- The income statement which will contain information about all the sources from you are drawing you income from like dividend from business, interest on capital , etc and submit to the Income Tax department.
- 3 years’ I-T returns on those financial documents.
- Balance sheet and profit & loss statements certified by a chartered accountant.
Convincing abilities:
After submitting all these documents, the banks may call upon for a personal discussion with you so as to get a better understanding of your business. It is your duty to support your financial documents with your ability to make your business grow. Therefore, the clarity of thoughts you display during the personal discussion to convince the bank about your credentials and the business’ prospects could go a long way in getting the loan approved. Furthermore, the line of business chosen by you, too, could be an influencing factor.
Your credit history
It is one of the important factors that most banks look in to before approving the loan; understand the credit standing of the prospective borrower. If you have a clean credit history, banks will surely prefer to finance your business. But if you are into debts of a personal loan or any type of loan, even as an individual, banks may not consider your loan application. If you have sufficient assets in the form of properties, shares etc, banks may find you secure enough to lend their funds to.