Businesses constantly need funding to grow and flourish. To expand a business, we need to purchase new machinery, build inventory, manage working capital and fund day-to-day operations. Sometimes businesses also need funds on a short notice due to emergencies and unexpected expenses. If the revenues are not enough to cover the requirements of the business, the need for getting a business loan arises.
Business loans are provided by banks, NBFCs and other financial institutions. They are offered to aid in running the business operations smoothly by fulfilling urgent funding needs. An instant business loan is a type of business loan with a fast approval and disbursement process. It is used to fulfill urgent business requirements like machine breakdowns, sudden tax liabilities and large customer orders.
At Shriram Finance, get instant business loans online. Invest now without worrying about raising the required money.
Key Highlights
- An instant business loan is a business loan with quick disbursement and a short approval process.
- Instant business loans are availed of to tackle emergencies such as machine breakdowns, labour strikes, sudden legal liabilities, etc.
- Before choosing an instant loan, we must consider the eligibility criteria, the interest rates, our ability to repay and the list of required documents.
- The business must have a good credit score and a sound business strategy in order to benefit from an instant loan.
What is an Instant Business Loan?
An instant business loan is an unsecured loan provided to meet the urgent financial requirements of a business. The amount of the loan depends on the requirements, the repayment ability and the financial situation of the business. As the loan application process is online, it is possible to get a business loan with online instant approval.However, we must know how business loans work before applying.
Shriram Finance offers instant business loans for purchasing machines, getting raw materials, building stocks and meeting your working capital needs. The approval and disbursal process is fast and requires minimal documentation. The loan is also safe, as the company has built solid trust and reputation over the years. The interest rates start at 15%* p.a. A business loan can help us grow our business.
When to Get an Instant Business Loan?
Businesses should apply for an instant business loan only in case of genuine need. We may require instant business loans during emergencies like labour strikes, unexpected legal liabilities, machine breakdowns, business disputes, etc. Whenever we need funds at a short notice, we can choose to get an instant business loan online.
Another important aspect to consider is the ability to repay. Our business must be stable enough to generate cash flows higher than our EMI after deducting fixed expenses like salaries and rent. We can use the EMI calculator to get an approximate EMI of the loan. Once we put in a loan amount, approximate tenure and interest rate, the calculator will provide an estimated EMI for us.
How to Get an Instant Business Loan?
We need to fulfill the required criteria, submit the necessary documents and have the repayment ability to get an instant business loan. Once we get these basics right, we become eligible for an online business loan.
Satisfy the Eligibility Criteria
Every lender has eligibility criteria for getting a business loan. We must make sure that our business satisfies the criteria before we make an application. This will result in a faster and smoother approval process. The criteria may include age limits, income thresholds, number of years in business, etc. The criteria are formed to estimate our repayment ability and credibility. NBFCs like Shriram Finance have very lenient eligibility criteria.
Shriram Finance provides instant business loans to individuals, partnership firms, private companies and public companies. The applicant can be a professional, self-employed individual or a business owner. They must not be more than 70 years of age at the time of loan maturity. They must also have completed a minimum of 3 years in business at the time of application.
Furnish the Required Documents
Before getting an online business loan, we must submit all the required documents to the lender. The documents are collected for judging our repayment ability and the future prospects of our business. The documents list is usually not very extensive. Basic documents like identity proof, address proof and income proof are required.
Shriram Finance requires minimal documentation before sanctioning a loan. The documents required are:
- Identity proof: We need to submit a photo identity proof of the proprietor/partner/director.
- Address proof: It is mandatory to submit address proof like an Aadhar card, electricity bill, driving license, passport, etc.
- Income proof: To establish income proof, we require either the bank statements covering the past six months or a copy of the income tax returns for the last three years. For companies, audited company accounts and cash flow statements from the previous year must be submitted
- Asset purchase proof: In case of a loan taken to buy an asset, we need to furnish the proforma invoice, sale deed and details of the margin money received. If the asset is already used by someone, we need to attach its valuation report.
Good Credit Score
Having a favourable credit score is crucial for getting an instant business loan. A credit score is a number representing the creditworthiness and repaying ability of a borrower. It is based on the repayment history, outstanding loans, number of accounts held, etc. The most popular credit rating in India is the CIBIL™ score.
A CIBIL™ score is a 3-digit number ranging between 300 and 900. A credit score above 750 is generally considered to be favourable. If we want to get an instant business loan online, we must ensure that we have a favourable CIBIL™ score. It will affect the amount of the loan, the interest rate and the loan tenure. Credit scores can be improved by paying dues on time, reducing credit utilisation, maintaining a credit mix, etc. We should form a detailed strategy for improving our CIBIL™ score for getting a business loan.
Having the Ability to Repay
Before applying for an instant loan, we need to ensure that we have the ability to repay it. The business needs to generate enough cash flows to cover the EMI after spending money on fixed expenses. Expenses like rent and salaries are unavoidable and have to be made in spite of having an EMI to pay. We should forecast the cash inflows for the next few months and assess the ability to repay. We can use the EMI calculator provided by Shriram Finance to get an approximate EMI. However, with proper strategies, we can save the amount of interest paid on the loan.
Summing Up
Businesses may need funds at a short notice during an emergency. If we do not have sufficient funds to cover the sudden expenses, we may choose to apply for an instant business loan. With the help of Shriram Finance, it is now possible to get a business loan with online instant approval. Instant loans are disbursed quickly and need minimal documentation. To apply now all we have to do is head to the website of Shriram Finance, fill in our basic details and furnish the documents required.
FAQs
1. What is the tenure of an instant business loan?
The minimum tenure for loans issued by Shriram Finance is 12 months. The tenure can go up to 60 months in the case of transport business loans.
2. Apart from interest, what other charges are levied on instant business loans?
As per the policy of Shriram Finance, instant business loans are subject to a Processing Fee and Closure Charges in case of prepayments. The processing fee is up to 2%, while the closure charges range from 3% and 6%*.
3. Is it possible to get reminders of EMI payments?
Yes. Shriram Finance sends us alerts about our loan repayment every month. The alerts will be sent to your mobile phone number or to your registered email.
4. What are the benefits of getting an instant business loan?
An instant business loan has a very short approval and disbursement process. The amount reaches us quicker than regular loans. Instant business loans are unsecured (without collateral) as well. The application process is quick and is to be done fully online.
5. Is collateral required for an instant business loan?
Most instant business loans are provided without collateral i.e. they are unsecured loans. This is why many small businesses decide to get business loans.
