The need for funds can be felt anytime when you are running a business. You might need funds for expansion, meeting the business’s working capital needs, or buying new equipment. In these scenarios, you can either use the internal reserves of your business to finance your needs or resort to business loans.
Business loans are the better alternative as they help you maintain the profitability of your business without a considerable financial outgo at once. Moreover, if your business does not have the required reserves, a business loan is the ideal funding solution.
Banks and Non-Banking Financial Companies (NBFCs) offer business loans for your business’s financial needs. However, the loans are subject to a specified credit limit. Do you know what this credit limit is all about?
What is a credit limit?
The credit limit is the maximum limit of loans that you can avail of. It depends on your eligibility qualifications like the business income, profits, business history, credit score, etc. If you have a high credit limit, you can avail of a higher quantum of loans and vice-versa.
If your business credit limit is low, the loan quantum available to you would also be limited. However, you can change that. There are ways to increase your business credit limit to avail of a higher quantum of loans. Let’s explore how.
How to increase credit limit on a business loan?
Here are different ways of increasing credit limit on your business loan to avail of the maximum finance -
Maintain a high credit score
The credit score is an important parameter when availing of loans. It depicts your business’s creditworthiness and is assessed by lenders when sanctioning business loans. If your business has a high credit score, i.e., 750+, its credit limit would be high. Alternatively, low credit scores reduce your credit limit. So, if your credit score is low, enhance it to enhance the credit limit too.
Boost your profits
High business profits result in increased credit limits. So, assess the profitability of your business and try to enhance it to boost up your business credit limit.
Keep your credit history clean
Your past credit history determines your credit limit. If you have been diligent in repaying your outstanding credit timely, have no defaults, and have a clean history, the lender would allow a higher credit limit on the loan.
Lastly, you can negotiate with the lender to enhance your credit limit when applying for a business loan. Lenders, usually, are conservative in determining your credit limit, and if you negotiate, you can get an increased limit for your business loans.
So, use the best way to increase credit limit when you apply for a business loan. Also, the limit varies across lenders, and so you need to do your research. It is better to assess the credit limit offered by different lenders and choose a lender with a high limit on business loans.
Shriram Finance is one such lender that allows high credit limits on its business loans. You can avail of a quick loan from Shriram Finance and get a higher source of funding. Shriram Finance offers SME loans for micro, medium, and small businesses for their financial requirements. With a legacy spanning 45 years, Shriram Finance is a trusted financial services provider in the industry, offering high credit limits on business loans.
Advantages of Shriram Finance Business Loan
Besides offering a high credit limit, here are other reasons why Shriram Finance Business Loans are one of the best loans available in the market.
High loan amount
One of the best parts of availing a business loan from Shriram Finance is the high loan quantum. Shriram Finance offers business loans ranging from Rs.1 lakh to up to Rs.1 crore. Thus, you can get considerable finance through Shriram Finance business loans.
Shriram Finance business loan is a multipurpose loan that you can use to expand your business, manage its day-to-day financial requirements, hire new employees, buy new equipment, etc. Whatever commercial, financial need that you have, Shriram Finance’s business loan would cater to it.
Affordable financing solutions
The rate of interest for the business loan offered by Shriram Finance starts at 15%. You can, thus, get affordable interest rates on the loan so that it does not become a burden on your business’s finances.
Shriram Finance business loans are available online as well as offline. You can apply for the loan online by filling up an application form. Once you submit the form, the company’s executive would get in touch with you to understand your financial needs and guide you with the loan application process. For offline application, on the other hand, you can walk into any nearest Shriram Finance branch and apply for the loan physically.Moreover, both new and existing customers can seek business loans as Shriram Finance offers loan solutions to MSMEs who might have trouble arranging funds from other sources.
Ease of repayment
The repayment tenure under Shriram Finance business loans starts from 12 months and goes up to 60 months. You can choose any tenure within these limits to pay off the loan comfortably. The loan is paid through Equated Monthly Installments (EMIs), and you can also arrange for an ECS (Electronic Clearing Service) facility for automated EMI payments from your bank account. This eliminates the possibility of repayment default and keeps your credit history spotless.
Shriram Finance offers personalized solutions to all businesses depending on their financial needs. Every business loan application is dealt with independently to assess the unique requirement of every business. After that, a tailor-made loan offer is made so that it fits your business needs effectively.
So, if you are looking for business loans with a high credit limit, Shriram Finance can be the right choice. The eligibility parameters of the loan are also simple and include the following -
- Minimum 3 years of business continuity
- A minimum annual turnover of Rs.20 lakhs
- A valid registration certificate of the business
- You should be aged at least 23 years, and the maturity age should not exceed 65 years.
- You should be living at the same address for at least the last 12 months
If you meet these parameters, you can get a loan for your business. Just submit valid identity proof, address proof, and your business’s financial documents, and your loan would be sanctioned within the shortest possible time.So, if you are looking for a high amount of business loan, enhance your credit limit by using the tips mentioned earlier or apply for a Shriram Finance business loan. Either way, you would be able to get the desired financing for your business with minimal hassles.