The need for emergency funding can arise when your business faces a downturn, to make an advance payment to a supplier, etc. In such cases, utilising your surplus may not be the ideal way ahead as it leaves you with a deficit for the future.
Opting for external funding is one of the correct solutions to avoid all of the above issues. However, selecting the right source of financing is crucial to eliminate the chances of defaulting.
A Personal Loan for self employed for business financing can help you out in times of emergencies to cater to financial shortages. You only have to comply with a few requirements to avail the funds quickly.
Some of these include:
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Eligibility criteria
Your business has to be at least 3 years old to become eligible for a personal loan for self-employed or a personal loan for business finance, also known as business loans. Additionally, you must fall within the age brackets of 22 and 55 years.
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Documents
The few documents that you need to provide to apply for a Personal Loan from Bajaj Finserv for business financing are:
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KYC documents – Driving License, Voter ID, Passport, PAN, Aadhaar, etc.
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Business proof document – GST registration certificate, Registrar of Companies certificate, Trade License, Memorandum of Association, Articles of Association, Partnership Deed, SSI registration certificate, etc.
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Financial documents – Balance Sheet, Profit & Loss Account statement, etc.
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Bank account statement of the previous one month.
How to increase your chances of approval?
Complying with the above requirements makes you eligible for a Personal Loan from Bajaj Finserv for business financing. Make sure you avoid common mistakes on your loan application to increases your chances of approval.
Additionally, fulfilling the following points will have a similar effect:
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Minimum credit score of 750
Your CIBIL score plays a significant role when you apply for an unsecured loan. You can avail a loan with a high credit score even if you have a low income.
A minimum CIBIL score of 750 makes you more eligible for these loans. You can ensure your business CIBIL score stays above 700 in various ways. Doing so makes it more convenient for you to avail business finance quickly in times of emergencies and with more beneficial terms as well.
The ideal way to improve your CIBIL score is through a credit card. You can also opt for a secured credit card against a fixed deposit. Keeping the credit utilisation under 30% of your credit limit and paying the total amount due within the deadline increases your score.
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Low debt-to-income ratio
The debt-to-income ratio or Fixed Obligation to Income Ratio (FOIR) is the ratio between your monthly expenses and income. A low ratio means you have more cash in hand after paying your fixed monthly dues. Hence, you will not face any issues while paying your loan EMIs.
The ideal debt-to-income is 50%. You can clear your credit card debt and foreclose your existing loans to lower this ratio.
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Applying for the right amount
Your loan application may be rejected if you ask for an amount that makes the loan risky. Application refusal will decrease your credit score.
Hence, use a personal loan eligibility calculator before you apply. The calculator tells you the loan amount you are eligible for based on your monthly income, monthly expenses, etc.
Features of a Personal Loan from Bajaj Finserv for business financing
Avail loans of up to Rs. 30 Lakh and utilise the funds without any restriction. You can invest it in your business or use it to meet personal expenses.
You also get repayment tenors ranging from 12 to 60 months to make your EMIs more affordable. Lastly, complying with all of the above requirements can help your loan application get approved within 24 hours. sprunki horror Endless Fun Awaits!
