Five-Year-Old Businesses Get Easier Access to Business Loans – Know How

Business Loan

How to get a Business Loan As a Five-Year-Old Business?

Grit and ambition are essential to make a rags-to-riches success story come true. However, many entrepreneurs need at least some financial help when growing their businesses. What can be the best financing source to get a company off the ground? The answer is a Business Loan. It is among the most popular forms of credit available to business owners of all sizes. Although most loan providers prefer companies with at least a few years of vintage, a five-year-old business has a clear advantage in this aspect.

Wondering how to get a Business Loan for a five-year-old business? In this post, we will examine the numerous steps that go into acquiring a Business Loan.

Calculate the Loan Requirement

Before applying for a Business Loan, evaluate the expenses and get an idea of the loan requirement. Deciding the loan amount involves identifying the purpose of taking the loan. Business expansion, loan refinancing, and operating expenses are the top three reasons SME owners take loans. While estimating the funding requirement, consider the costs beyond initial investments, including maintenance costs, insurance and utility bills. 

After deciding the loan amount, use a Business Loan calculator to determine how much you can borrow and what will be the total loan cost as per the EMIs you can pay.

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Create a Business Plan

Before applying for an instant Business Loan online, aspiring borrowers must create a business plan and know where they will spend the loan amount. With a robust plan, it will become easier for prospective loan providers to evaluate commercial viability. It will be a roadmap for their corporate future. However, these days, several NBFCs have emerged that do not need any formal business plan but demand business vintage and a minimal annual turnover. This kind of loan financing is an excellent opportunity for five-year-old businesses planning for expansion in a financially lucrative way.

Consider Repayment Tenures

The next step is to decide on the repayment plan. Be realistic with the EMI amount you can afford to pay each month. Don’t ignore external factors like interruptions in the supply chain, seasonal pulls or social changes. 

NBFCs understand each business’s unique needs, which is why they offer flexible repayment terms ranging from 12 months to 3 years. 

Decide on the Loan Type

After deciding to apply for an SME loan, the next big decision is choosing the loan type according to the business growth goals. NBFCs provide different kinds of loans to five-year-old businesses, including term loans, working capital loans and loans against property. Choose one that is ideal per your business requirements.

Start the Application Process

After researching and deciding the loan type required, it’s time to start the application process. The procedure involves several steps listed below.

  • Selecting the Loan Provider: Business owners with decent credit scores qualify for Small Business Loans more easily and get better loan rates and terms. Choose a loan provider that offers the desired loan type and pays it out within the required timeframe. With online applications and documentation, modern NBFCs have quick access to business data. Consequently, they can make decisions quickly and disburse loans within days.
  • Getting the Documents Ready: Each NBFC has slightly different documentation requirements to process loan applications. The usual ones include income, identity, address proofs, financial documents, and proof of ownership. Refer to the loan provider’s checklist of required documents and get them ready for the loan application.
  • Submit the Application: Different loan companies have unique application procedures. Filling out the application form with the required details, submitting the necessary documents, and submitting the application form are typical parts of the process. It could mean leaving a phone number with the application and discussing the next steps with a customer representative. 
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Follow the NBFC’s instructions and wait for approval after application. Once approved, the loan provider will arrange loan disbursal within a few days.

Consider the Options Before Finalising

Applying for a Business Loan online is a crucial financial decision that no one should take lightly. Only the borrower can decide if taking out an SME loan is suitable for their finances and business. Economic disruptions can profoundly impact different aspects of the business, including revenue forecasting and financial stability. So, before finalising the loan application, double-check to ensure that you’re covering these bases.

  • Have a precise loan amount in mind before applying, and know precisely how to invest it to fund business growth.
  • Maintain a credit rating above 700 to get the desired loan amount at the best interest rates.
  • Even if the loan provider does not make it mandatory, create a business plan to identify crucial points that borrowers often overlook, such as rational revenue projections.
  • Be realistic about affordability in terms of EMI payments, and identify external factors that can jeopardise while choosing a repayment tenure.
  • Discuss plans with business associates and advisors to choose the correct loan type and know how to get a Business Loan.
  • Reduce financial obligations to bring down the current debt and prove high repayment capacity to the loan providers.
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Financial support from an SME loan goes a long way during uncertain times. Several NBFCs provide SME loans with easy and quick access to the necessary funds. They help provide the required funding based on the borrower’s history without the hassle of lengthy application processes. 

Entrepreneurs with business that are at least 5-years-old can take a small Business Loan from top lending institutions like Clix Capital at favourable terms, provided they fulfil the eligibility criteria.

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