WE ARE SME LOAN PROVIDERS.
WHAT IS AN SME.
SME simply means : Small and medium-sized enterprises or small and medium-sized businesses are businesses whose personnel numbers fall below certain limits. The abbreviation “SME” is used by international organizations such as the World Bank, the European Union, the United Nations and the World Trade Organization.
WHAT IS A SMALL BUSINESS LOAN?
A small business loan is a collateral-free loan that lenders make available for small and medium enterprises. It is a kind of credit facility that SMEs can take for their working capital, long-term, growth, or expansion needs. By taking an SME loan, small enterprises can realize their potential to the fullest.
WHAT IS AN SME LOAN?
An MSME has limited resources as compared to established businesses, but the need for funds can arise at any time. For instance, a small chemist shop might have seen an increased demand for products during the Covid-19 pandemic. To meet this demand, they can take a small business loan to purchase their inventory without relying on the cash flow. If your business has been running successfully, you can take a loan to shift to a better workplace or open another branch. For that, you will need money to pay for property, staff, establishment, and other necessities that you can fund with an SME loan.
A small business may need funds for a variety of purposes, like to handle everyday operations or to expand. The best thing is that SME loans are easy to apply for. They also have easy eligibility conditions and minimal documentation requirements, thus making them small-business friendly in many aspects.
5 STEPS TO GETTING A BUSINESS LOAN.
Knowing the steps to getting a business loan can help reduce frustration and increase your chances of approval.
A business loan can help you start or grow your company, but navigating the loan process, as well as tightened lending standards, can be intimidating. Breaking it down to manageable steps — from understanding qualifications to shopping for lenders and knowing how to apply for a small-business loan — can help you secure the funding your business needs.
Here’s how to get a business loan in five simple steps :
1. Determine if you qualify for a business loan.
Answer these questions to help determine whether you might qualify for a small-business loan:
a, What’s your credit score?
b, How long have you been in business?
c, Do you make enough money?
d, Can you afford the payments?
e, Do you have collateral?
2. Decide what type of loan you need to fund your business.
Lenders will ask why you need to get a small-business loan. Your answer will likely fall into one of three categories and determine which type of business loan is right for you:
You want to start a business. Lenders require cash flow to support repayment of the loan, so companies in their first year typically can’t get business loans. Instead, you’ll have to rely on other types of startup financing, like business credit cards and personal loans.
You want to manage day-to-day expenses. A business line of credit could make sense. This flexible kind of funding lets you tap into financing as needed to cover expenses like payroll or unexpected costs like repairs, offering a useful safety net as needed
You want to grow your business. Consider a government-backed SBA loan or traditional term loan, which often have higher borrowing maximums — SBA loans can reach $5.5 million, for example. Many lenders also offer specific products to fit a growing company’s needs, such as loans for equipment or vehicle purchases.
3. Compare small-business lenders
There are three main sources for getting small-business loans: online lenders, banks and nonprofit microlenders. Each typically has multiple products, but one may be better in certain instances than others.
When to get a business loan from online lenders:
You lack collateral.
You lack time in business.
You need funding quickly.
Online lenders provide small-business loans and lines of credit from about $1,000 to $5 million. The average annual percentage rate on these loans ranges from 6% to 99%, depending on the lender, the type and size of the loan, the length of the repayment term, the borrower’s credit history and whether collateral is required.
These lenders rarely have APRs as low as those at traditional banks, but approval rates are higher and funding is faster than with banks — as fast as 12 hours.
When to get a business loan from banks:
You’ve been in business for at least two years.
You have good credit.
You don’t need cash fast.
Traditional bank options include term loans, lines of credit and commercial mortgages to buy properties or refinance.
Through banks, the U.S. Small Business Administration provides general small-business loans with its 7(a) loan program, short-term microloans and disaster loans. The SBA provides loans up to $5.5 million, with 7(a) loans averaging $533,075 in fiscal year 2020, according to the Congressional Research Service. The average SBA microloan is $13,000.
The SBA also has a 504 loan program that helps promote communities’ economic development by funding business’s fixed asset purchases — like land, buildings or equipment — through long-term, fixed-rate financing.
Taking out a small-business loan from a bank can be tough due to factors like lower sales volume and cash reserves. Add bad personal credit or no collateral to that, and many small-business owners come up empty-handed.
Getting funded takes longer than other options, but banks are usually the lowest-APR option.
When to get a business loan from microlenders:
You have bad credit or no credit history.
You are a new business.
You can’t get a traditional loan.
Microlenders are nonprofits that typically lend short-term loans of less than $50,000. The APR on these loans is typically higher than that of bank loans. The application may require a detailed business plan, financial statements and a description of what the loan will be used for, making it a lengthy process.
Also, the size of the loans is, by definition, “micro.” But these loans may work well for smaller companies or startups that can’t qualify for traditional bank loans due to a limited operating history, poor personal credit or a lack of collateral.
Accion Opportunity Fund, Kiva and Accompany Capital are just a few examples of microlenders.
Estimate the cost of getting a business loan.
4. Gather your documents.
Before you apply, make sure you have all the required documentation. Locating these files now and having them easily accessible will help streamline the process of getting a small-business loan.
Depending on the lender, you’ll need to submit a combination of the following:
Business and personal tax returns.
Business and personal bank statements.
Business financial statements.
Business legal documents (e.g., articles of incorporation, commercial lease, franchise agreement).
Business plan.
5. Apply for a business loan
You made it! Now that you’ve determined which type of loan and lender are right for you, it’s time to apply.
Start by looking at two or three similar options based on loan terms and annual percentage rate, or APR. Because APR includes all loan fees in addition to the interest rate, it’s the best way to understand the total cost of a business loan for the year.
Of the loans you qualify for, choose the one with the lowest APR (as long as you’re able to handle the loan’s regular payments), and apply with the documents you’ve gathered.
Note that credit bureaus don’t differentiate between business and personal inquiries. If you use your personal credit history, your credit score could be affected when applying for a small business loan, which is why it’s important to go with your best bet.
WHAT IS A SMALL BUSINESS LOAN?
A small business loan is a collateral-free loan that lenders make available for small and medium enterprises. It is a kind of credit facility that SMEs can take for their working capital, long-term, growth, or expansion needs. By taking an SME loan, small enterprises can realize their potential to the fullest.
WHAT IS AN SME LOAN?
An MSME has limited resources as compared to established businesses, but the need for funds can arise at any time. For instance, a small chemist shop might have seen an increased demand for products during the Covid-19 pandemic. To meet this demand, they can take a small business loan to purchase their inventory without relying on the cash flow. If your business has been running successfully, you can take a loan to shift to a better workplace or open another branch. For that, you will need money to pay for property, staff, establishment, and other necessities that you can fund with an SME loan.
A small business may need funds for a variety of purposes, like to handle everyday operations or to expand. The best thing is that SME loans are easy to apply for. They also have easy eligibility conditions and minimal documentation requirements, thus making them small-business friendly in many aspects.
HOW A SMALL BUSINESS CAN BENEFIT FROM AN SME LOAN.
An SME loan is easier to access for a small business than a regular business loan offered by banks. This is because it is specifically designed to support small business needs. These are some of the ways a small business can benefit from a small business loan.
Minimal Documentation Requirements
The major advantage of SME loans is that they have minimal documentation requirements. While a regular business loan requires extensive financial documents, property deeds, and a list of partners, owners, and shareholders, you need only the basic documents to apply for a small business loan. For BECTIC FINANCE COMPANY LIMITED, you just need the following documents:
Completed loan application form.
Passport size photograph
Identity Proof, which may be your Aadhaar Card, PAN Card, or government ID if you are a government employee
Address Proof, which can be your Aadhaar Card, passport, driving license, voter ID card, or utility bills for the last 2 months
Proof of Ownership
Financial Documents, which include the following:
PAN Card for a firm, company, or individual
GSTIN
6-months bank statement
Copy of the most recent Income Tax Return form
Computation of income, audited balance sheet, and profit & loss account for the last 2 years
Proof of continuity of the business of 3 years, which can be your sales tax certificate, establishment, ITR, or trade license
To meet these minimal documentation requirements, you do not need to run from pillar to post to arrange them.
No Collateral Requirement.
Small business loans are unsecured, which means you do need to pledge any asset, property papers, or business equipment for availing them.
Competitive Interest Rates.
Since small business loans are specifically designed to help SMEs, the applicable interest rates are affordable and competitive.
Flexible Repayment Tenure.
The SME can also choose their repayment tenure as per their comfort level and repayment capacity. For instance, BECTIC FINANCE COMPANY LIMITED offers SME loans for 12 to 36 months (12 to 48 months for self-employed professionals). You can use a business loan EMI calculator to choose your repayment tenure as per the EMI amount you are comfortable paying every month.
BECTIC FINANCE COMPANY LIMITED provides easy SME loans to small businesses to meet their capital needs. With minimal documents, you can avail them easily without any collateral. SME loans from BECTIC FINANCE COMPANY LIMITED offer comfort and convenience to make borrowing affordable and simple. apply now and give yourself the funds required for operations, expansion, and growth.
For any queries, find us here :
BECTIC FINANCE COMPANY LIMITED
Website : becticfinance.com
Email : info@becticfinance.com
Phone number : +85281924518
Intermediaries/Consultants/Brokers are welcome to bring their clients 100% protected. In complete confidence, we will work together for the benefits of all parties involved.
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