[ad_1]
Investing money on small businesses is generally considered risky by banks due to which the eligibility criteria have been set to a high margin. The borrower or the entrepreneur needs to qualify those set of criteria so that the desired loan amount is not denied to him or her by the bank. So let us find out the gist of those criteria fulfilling which will prevent banks from hesitating to grant the desired loan amount to the entrepreneur.
Eligibility Criteria for Availing Small Business Loans
• The borrower’s business must be an entity that is registered or incorporated in any of the Indian States.
• The business must be more than a year old.
• The annual turnover of the business should show a rising trend, the business should not be at a loss, ITR must have been file and the balance sheet must be audited by a registered CA.
• The nature of business of the borrower should be development, innovation, deployment or commercialization of technology-driven new products, processes, or services.
• The small business should not be a result of splitting up or reconstructing of an already existing business.
• The borrower should have a clear credit history with a CIBIL score of 750 and above.
With all these eligibility criteria, availing small business loans or entrepreneur loans from banks may appear difficult to many entrepreneurs. But there is no need to panic as there are a plethora of other funding options which will enable the entrepreneur to get that extra working capital for his or her business. Here are a few of them.
Funding Options
Credit Cards
With a credit score of 750 or above, the business owners can avail a credit card with a handsome limit which he or she may use for funding of the business. Apart from the payment of interest on the credit that has been used, the credit cards at times are often complemented with various promotional introductory rates and reward programs.
Crowdfunding
Crowdfunding helps the small-business owners to procure funds by means of online campaigns. Here the business owner has the option of giving gifts to donors instead of paying them back. With the coming up of the new equity crowdfunding method, the entrepreneur may knock-up investors who agree to finance his business in exchange for equity ownership.
Personal Loan
When getting small business loans or entrepreneur loans becomes difficult, financing can be availed through personal loans from banks with a credit score of 650 or above. However, if that is not possible, the entrepreneur may avail the personal loan often through a number of offline and online lenders.
Grants
Though not an easy way, the business owner can raise funds by means of grants from government agencies or private foundations by preparing and presenting a good business proposal before the agencies for getting the required approval.
Micro Loan from NGOs and NPOs
Micro-lenders from NGOs and NPOs may finance a small-business owner as they attend to traditionally disadvantaged or small business owners who are struggling economically. Of course, each lender usually has preferred businesses that they attend to.
[ad_2]