What are the common challenges in securing a pharma loan?

Applicants might have to consider a variety of factors in the process that sometimes make it tough to get a pharma loan. One is the eligibility criteria of the lending institution. Some commercial banks or non-banking financial companies (NBFCs) have credit scores, business vintage, and turnover requirements.

Preparing all documentation is yet another issue at that moment. The above documentation demanded by lending institutions frequently involves financial statements, tax returns, business plans, and proof of licenses or permits. Going back and forth to ensure that everything is accurate, up-to-date, and in the right format would require time and be a hassle.

Another obstacle could be related to the collateral; many NBFCs or financial lending companies ask for physical assets for insurance purposes. Such applicants might find it hard to comply since they do not have much of an asset base or do not want a secured loan.

Insufficient financial history or inconsistent cash flow might be other challenges that make it hard for some applicants to justify the repayment capacity of such a loan, which may alter the decision of the lending institution as well. Proper planning and consultation can help tackle such obstacles smartly.