Get the Tata Capital App to apply for Loans & manage your account. Download Now

Blogs SUPPORT
Loans For You
Loans for Business
Investment
Insurance
Apply

Quick Links for loans

Quick Links for Insurance

Investment

Offers Quick Pay
Back

Equipment Finance

Avail Digital Equipment Loans
up to Rs. 1 Crore

  • Attractive ROIs
  • Customizable Loan tenure
Know More
Back

Equipment Leasing

Avail Leasing solutions
for all asset classes

  • Up to 100% financing
  • No additional collateral required
Know More
Back

New Commercial Vehicle Financing

  • First time user
  • Retail and strategic Clients
Know More
Back

Used Commercial Vehicle finance

  • Repurchase
  • Refinance
  • Top up
  • Balance Transfer
Know More
Menu  
 
Apply Now

Tata Capital > Blog > Loan for Business > 5 Simple Ways to Improve Your Chances of Getting a Small Business Loan

Loan for Business

5 Simple Ways to Improve Your Chances of Getting a Small Business Loan

5 Simple Ways to Improve Your Chances of Getting a Small Business Loan

Establishing a small or medium-sized business can be challenging because of the financial burden associated with set-up, expansion, and initial operations. To aid the process of generating SME working capital, many banks and financial institutions give out small-medium enterprise loans.

Find Out More

If you are looking to apply for a small business loan, you must have a sound business or expenditure plan in mind. Besides these, you will also have to present detailed credit records to your lender. Here are some tips you can follow to strengthen your small-medium enterprise loan application and improve your chances of loan approval.

1. Robust Business Plan

Before you apply for a small business loan, you need to have a proper business plan outlining your ideas and plans. Ideally, your business plan must be conscious of the socio-economic conditions surrounding your industry. It should also address all the regulations put in place by the government and must show potential to your lenders. Your business plan should also document how you plan to spend the loaned amount and why you need it in the first place. A well-thought-out business plan addressing financial projection and accurate market analysis will have a better chance at SME business loan approval.

2. Efficient Management of Cash Flow

Every financial institution that gives you an SME business loan will analyse your ability to repay it before approval. The liquidity position of your business must be stable for a lender to consider your application for an MSME loan. Before approaching a lender, study your liquidity and the ratio of cash you have available for repayment. To improve your liquidity, try to eliminate all unnecessary expenditure and enforce better cash management discipline.

3. Well-Sorted Documentation

While applying for an SME loan, you will need all the legal and tax documents related to your business. Often, such paperwork might not be sorted clearly. You might even forget to include some essential documents. Both of these can lead to rejection from your lender.

To prepare for an SME business loan application, keep your GST, income tax, credit-related, and registration documents in order. If there are any legal loopholes in your business papers, get them resolved before applying for an SME term loan.

Additional Read:- 5 Things You Can Fix With a Small Business Loan

4. Better Credit Score

Your business’ credit score is an indication of its ability to manage the debt repayment. Regardless of the bank or financial institution you choose, you will need a good credit score to secure an MSME loan. You can seek a credit score from agencies like CRISIL or ICRA.

To improve your credit history, maintain a credit utilisation ratio of about 25%. You should also ensure timely debt repayment and resolution of outstanding debt on your business.

5. Timely Payment of Fees

For a good chance at loan approval, pay all the fees associated with the application in a timely fashion. Also, keep an account of all the extra expenses and penalties, and make sure you set aside some amount to pay those.

The best lender for a quick and hassle-free SME loan is Tata Capital. Our “MSME loan apply online” page contains all the details related to eligibility and documentation. The interest rates for our small business loans start at 19%, while their repayment tenure is flexible.

Additional Read:- Can You, a Small Business Owner, Take a Business Loan?

For a quick approval of your MSME loan, apply online using our website or reach out to our representatives.

Apply Now

Give Your Business the Right Boost: Apply for a Business Loan Today

Apply now
Popular Searches
business idea udyogini scheme hsn code full form low investment business ideas top 10 most successful businesses to start transport business import export business in india mineral water plant cost collateral free loans
Disclaimer

Most Viewed Blogs

Trending Blogs

Calculator

Personal Loan EMI Calculator

Personal Loan EMI Calculator
Home Loan EMI Calculator

Home Loan EMI Calculator
Business Loan EMI Calculator

Business Loan EMI Calculator
Used Car Loan EMI Calculator

Used Car Loan EMI Calculator
Two Wheeler Loan EMI Calculator

Two Wheeler Loan EMI Calculator
Loan Against Securities Calculator

Loan Against Securities Calculator
Loan Against Property Calculator

Loan Against Property Calculator
More Tools
Our Subsidiaries
Our Other Websites

Useful Links and Resources

Most Important Terms & Conditions - Home Loans

Download in your preferred language

Download

Policies, Codes & Other Documents

Most Important Terms & Conditions - Home Loans

Download in your preferred language

Download

Tata Capital Solutions & Services

Uh oh, something went wrong

Please try again later.