How can a manufacturing business qualify for the loan?

Manufacturing companies can improve their chances of qualifying for a business loan by taking the following steps:

• Maintain a good credit score by making timely repayments on existing loans and credit cards. Typically, a score above 700 is ideal.
• Have financial statements that demonstrate a healthy and growing business. Lenders want to see rising revenue and profits over the years.
• Keep other debt obligations low. The total monthly existing Equated Monthly Instalments (EMIs) should not exceed 30-40% of monthly turnover.
• Have collateral to offer as security for the loan amount. Assets like property, equipment, etc., help secure the loan.
• Ensure all business registrations, licenses, taxes and legal compliances are up to date without defaults.
• Prepare a solid business plan and loan proposal that outlines how the funds will be utilised profitably. Project realistic growth estimates.
• Gather all required documents for the application, such as Know Your Customer (KYC), bank statements, financial reports, business documents, etc., well in advance.
• Build relationships with bankers by maintaining accounts with them. A good transaction history and rapport will be advantageous.

Avoid frequent loan applications, as multiple rejected applications can negatively impact your credit score.