Micro and small enterprises continue to grow at an exceeding rate pointing towards a future which will see a larger concentration of such businesses across the country. A business-friendly landscape, a positive financing atmosphere and a shift towards indigenous industries has fuelled the growth of business specific to the socio-economics of each region.
One such example of a state economy growing on localised strengths is Assam. With its numerous tea estates, it is the largest economy in Northeast India. Along with one of the highest concentrations of tea plantations in India, Assam is also home to 20 industrial hubs, 3 centres for industrial growth, 1 export promotion park while being one of the popular tourist destinations.
While trade and commerce are flourishing in this state, entrepreneurs and business owners also need additional finance to meet various long-term and short-term business goals. Financial institutions thus offer business loans in Assam to help them meet multiple business requirements.
Business owners need to fulfil a few eligibilities required by the lender to avail such advances. Moreover, before approving a business loan, lenders also assess the feasibility of borrower’s expansion plans, repayment capability, and such other factors that establish confidence. Taking care of these requirements before applying for a business loan in Assam can help ease loan approval.
Requirements to meet for easy business loan approval
High credit score
Credit score of the borrower carries a significant weightage in case of unsecured loans like a business loan. It is a 3-digit number lenders refer to when assessing a borrower’s likeliness to repay debt. Usually, a credit score of 750 and above is considered satisfactory for availing a business loan.
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A high credit score also means the applicant stands a chance of additional beneficial terms & conditions as well as affordable rates of interest from the borrower. You can maintain a good credit score by taking a few steps.
Keep track of EMI deadlines
Pay off debts like credit card bills within time
Refrain from applying for multiple loans
Keep your credit utilisation ratio around 30%
Avoid availing excessive debt
Keep a balanced mix of types of credit
Take care of these things to keep your credit score high. Avail the loan easily to meet various business requirements. Business loans are one of the possible sources of working capital for business, among other things.
So, if your credit score is high, a business loan in Assam becomes more accessible with such offers.
Business’s income and cash flow
Steady cash flow in your business leaves a positive impression on lenders as it means the borrower can conveniently sustain loan repayment. It also represents your business’s financial health.
Therefore, it is essential to keep a healthy stream of cash flow in your business which primarily includes paying off your creditors on time and keeping the sources of working capital like bills receivable, debtors, etc. clear. Also, make sure to avoid any cash management pitfalls to improve cash flow.
Your business vintage
A business’s years of operation play a significant role in projecting it’s stability to the lender. For this reason, some of the best lenders require you to have a business vintage of at least 3 years to avail the loan.
So, if you have your business running for over 3 years with a healthy financial condition, you stand a good chance of approval of business loan in Assam.
Debt amount your business carries
Lenders check your debt-to-income ratio to assess the amount of debt you need to pay every month against your business’s gross monthly income. A debt-to-income ratio of up to 50% is considered healthy for the purpose.
A well-chalked out plan for loan utilisation and repayment helps gain the lender’s confidence, thus helping in a quick and easy loan approval.
So, prepare yourself with these steps before applying for a loan to get hassle-free approval. Fix any flaws in your business plan to further improve your chances of approval.