Various factors affect the eligibility of Business Loan and it varies from bank to bank. The key factor is repayment capacity i.e. ability to repay loan. Exactly bank check your business status, profits, financial statements and scope of success. Such as Banks will assess repayment capacity on the basis of the organization or business you run.
For your convenience we have put down some important factors to check your eligibility of business loan. Before you proceed for business loan go through these factors.
Age- Age always play an important role in the eligibility and repayment capacity of the applicant. Banks usually sanction business loan to self employed or business owner individuals whose age ranges between 24-65 years.
Stable and Sustainable Business- A successful business shows positive impact on improving your eligibility for a business loan. Individuals who are applying for business loan that they are running it should have completed at least 3 years in market. And apart from this you must be involved in handling stable business at least for 5 years because it will increase your eligibility.
Financial Statements- For this banks calculate repayment capacity by using current and previous financial statements of your company or organization. It is very typical and banks take it very seriously and any type of financial stability due to mismanagement will directly reduce your eligibility. Well maintained and clean balance sheet show financial stability and clear transactions will increase your eligibility of business loan.
Outstanding EMIs- Make sure before you are going to apply any business loan, you don’t have any pending or previous EMIs left because it will not only affect eligibility and but the amount of disbursal also. On basis of EMI amount is calculated to you can repay other contributions or reduce them to avoid any extra burden of business loan.
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