If you are thinking about applying for a business loan, you must definitely lay a solid
foundation by building a relationship with the people from the firm that will be loaning you the amount for your business.

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A lot rests on you identifying the key contacts (decision influencers) in the company and developing a rapport with them; you learn about how the company functions and the more likable and trustworthy you come across, the better your chances are of being a loan candidate. And as the rule goes – people do business with those they know and trust.

1. Be clear on the PURPOSE of your loan: Good reasons for taking a business loan
include investing in real estate/commercial space/home; a piece of equipment,
software/hardware/technology and the like; basically where the returns can be
achieved in a fair amount of time. Reasons that are absolute no-no’s include financing losses/debts or paying towards business assets that are unnecessary and will not yield anything.

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2. Apply for the CORRECT amount you need: Often small businesses don’t ask for a
sufficient loan amount and this leads to applying for a second loan due to lack of
working capital, causing delays in the process. Overestimation, on the other hand, can make the lender question the business owner’s credibility and calculation. Create a budget that is supported by financial projections that are as accurate as possible and show that you’ve done your research.

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3. Demonstrate your RELIABILITY: Provide correct/worthy collateral so that the lender
can judge the reliability of you, the borrower. A credit score (from CIBIL) of 650-700
is considered acceptable, but doesn’t guarantee a loan. Most banks or lenders will
prefer that you have a credit score at least in the 700-800 range.

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Other factors like nature of the business you are getting into; the risks involved, the operating costs
margin – which determines your survival in the long run; and your present loan status (if any).

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4. Your work/business HISTORY: Banks and lenders provide term loans to businesses
which are over 2 years old as they have a consistent record of incoming accounts. A
lender gives money based on the company’s cash flow since this ascertains the
ability to successfully repay the loan taken.

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5. Prepare the PAPERWORK for your loan application: You will need to include your
business plan with profiles of all the business owners, investment details and
projections (profit & loss, balance sheet and cash flow statements) and personal
financial information as well as recent IT returns for anywhere between 3-5 years.
Remember that the lending institution will carry out checks of its own, so be sure to
have your financial particulars in order.

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6. To get connected to verified loan agents, log onto getspini.com and find leads to what you need.

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