Taking Business loans is an important decision for a small business as this business loan is either to fulfill a working capital need or to create something new which will take the business to the next level. Either ways a business loan enables to small businesses to set on a path of growth. The small businesses have limited set of choices when it comes to choosing a right lender, there’s the option to borrow from friends and family however that has a big risk of running the relationships, the other option is to buy from local lenders, they charge an astronomical interest rate which often results in a default as the overall amount becomes bigger than what a business can actually earn. Then there’s option of taking a small business loan from the traditional lenders, they however demand collaterals and take a lot of time to process the loans which often spoils the entire purpose of taking the loan. And, eventually, there are the digital lenders who are very friendly and offer fast short term business loans.
Thus, it becomes important choosing he right lender for your business loan, here’s a quick checklist to follow:
Is the Lender Enabling your Growth? A lot of traditional lenders do not respect the small businesses, they keep calling them again and again and ask for multiple documentations and collaterals. It is as if the small businesses are seeking a favor rather than giving them business. Thus, it is important to understand if the lender is giving you respect and values your relationship because even if you get a loan, you might face a lot of problems later on.
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Does the lender have a right product for you? Traditional lenders offer same products for all businesses. While, every business is unique and needs a unique product. Thus, look for a lender which has a right product that suits the business cycle and requirements. The digital lenders like Indifi have specific products for every type of business, some such unique products are for retail shops, travel agents, restaurants, hotels, ecommerce sellers and vendors who supply to large corporations. These lenders offer the right and fast short term business loans for your business loan needs
Is the Application Process Smooth? A quick and simple application process is a must for seeking business loans, specially for the small businesses as being a business owner you would like to invest your time in growing the business instead of putting time in loan applications. While, traditional lenders make people visit branch on multiple occasions, the digital lenders like Indifi have a completely online process which involves filling a simple online form and submitting documents online itself
Is the Process Transparent? Does the lender give you a visibility of the loan application and approval process for your business loans, or is it on the whims and fancies of the business owner. The digital lenders like Indifi help you understand the complete process and provide real time approvals which are completely automated without any individual bias.
Does the lender offer flexible repayments? Repayment is something one needs to take care of since the very beginning as taking business loans is just the starting of a relationship with the lender, your loan repayment performance enables you to get better term or working capital loans in future, so choose a lender which gives flexibility in repayments. The digital lenders like Indifi offer repayments that are linked to business transactions and also offer regular monthly, fortnightly and weekly installments.
Check for Fee and Penalties. Always check for the processing fee and other penalties like prepayment penalties and other charges that a lender may offer in your loan. Always chose a lender which offers you the best flexibility and minimum penalties. A lot of lenders ask for a very high processing fee to sanction fast short term business loans or even working capital loans in India. One needs to be very careful in choosing the right lender.
Following this quick guide will help you choose the right lender for your business loans and always remember choosing a right lender is the beginning of a relationship as the good behavior in a business loan is often rewarded by getting better loan offers from the lender and it improves your credit profile to get much bigger business loans in future.