Living in the era of start-ups indicates the importance of business loans. Owing to the simple assessment that not all of us are born with a silver spoon; revolutionary aspirations could come from a middle-class background also. One’s background should never stop his or her ideas from taking wings. Business loans were born for this very purpose.
First of all, what is a business loan in its truest essence?
In simple terms, a business loan is financing you avail from a bank to meet the urgent needs of your business that is still in its developmental or growth stages. This definition extends to existing businesses also, who need financial assistance while buying important machinery or mechanisms that ensure a boost in production.
What are the advantages of getting a business loan?
Out of the many benefits that are usually attributed to business loans, the most important one is that if a business loan is lent to the corporate entity, the loan will not have to be repaid by the business owner if the company fails. This relieves the business owner from paying huge amounts in case the company fails to pay up the loan. One would then ask, what would happen then in case the company fails to pay up? In an event where the company does fail to pay up the loan amount, the business is liquidated. This is then paid back in parts or whole to the total of funds borrowed. Business owners should keep this in mind before availing a loan for their business.
Another important advantage is that these loans, considering the current market climate, have unbelievably low-interest rates. Basically, a large loan that you take right now, or in the near future for your business, will have much lower overhead than the one you happen to avail in about a couple of years’ time. This, therefore, is the most opportune moment for you to expand your business.
Now, business loans come with nuances that you need to keep an eye out for. Considering all the possibilities that come with a business loan, you need to make a thoroughly calculated decision about the nature and intensity of the loan you would plan to avail. Once you decide and cement your decision and plan, here is what you would need to make that loan happen.
Paperwork needed to avail of a business loan
Below is a checklist of documents that will guide you on how to get a business loan:
- Identity proof – driver’s license/PAN Card/Passport/Voter’s ID card
- Address proof
- Bank statement
- Latest ITR with the computation of balance sheet, income, profit and loss a/c for the last two years
- Proof of continuation
- Mandatory documents like sole proprietorship declaration, certified true copy of memorandum and articles of association
- Last three years audited financials
Starting a business is no longer impossible. Far too often have you wondered of how to get a business loan. Get your documents in place and plan out your scheme of how you would make use of the money the bank lends you. Once that has been taken care of, nothing can stop your business from being established.