Raising funds in India has always been a complex task. Companies and organizations look for options to get business loans but often find it difficult to approve them. Mostly because either they cannot complete the required paperwork or do not have any collateral to offer. Noteworthy, due to the lengthy verification process, the approval generally takes a lot of time.
However, things are changing now. Many banks and NBFCs are opening up to offer instant business loans if you fulfill certain business loan criteria. Therefore, when businesses require immediate cash, they need not worry now.
In short, instant loans can be defined as loans that can be approved immediately. Instant business loans are generally given for a shorter time than regular business loans, such as machinery loans, working capital loans, capital loans, and Flexi business loans. These business loans do not require much documentation and are easier to obtain.
Reasons for a company to need an instant business loan.
1. Opportunity: If a company is getting a golden opportunity or an advantage requiring immediate capital, it is best to raise it through instant business loans.
2. Payment to Vendors: If a company cannot pay its vendor, then your company’s reputation may be disrupted. To ensure timely payment, an instant business loan can be availed.
3. Payment to employees: If you do not pay your employees in time, it may lead to employee attrition and decreased morale. So, if you find yourself in a position where you cannot pay your employees, instant loans can be one of your best options.
4. To buy equipment: When you cannot conduct business operations due to certain equipment’s unavailability, you can raise it through instant business loans.
Sources from which you can get instant business loans
If your business plan is strong enough, then you can get an innumerable list of references to get an instant loan from, which could be:
NBFC (Non-Banking Financial Companies): These companies are allowed to take deposits from the public. Hence, they can provide instant loans to individuals who need them.
Venture capital: These firms look for a controlling interest to make a relatively large investment. They usually provide early-stage funding.
Crowdfunding: These are web-based projects. Individuals opting for this must have a business idea for a project, and they could reach thousands of potential investors.
Angel investors: These are individuals who are willing to fund new ventures and ideas.
Private sector banks: Although the process is a bit stringent, it provides excellent customer service once you fill in the strict eligibility criteria.
To get any business loan, you must have a full-proof business plan and share your vision and mission with the lender. Your business plan should be strong enough to persuade the lenders that the project will give you enough money to repay the business loan. Also, show them how you will grow your business in the future and generate other cash flows. You will also need to prepare your company’s financial statement to show your company’s position, your projected revenue and expenses, and their estimation method.
Tips to reach the eligibility criteria to get an instant business loan
- Ensure your business’s’ registrations are done properly, including GSTN, company establishment license, etc.
- Tax-related paperwork should be up to date.
- Apply for an amount you can afford to repay
- The purpose of the loan should be obvious and genuine.
- Reveal true information because if they find out in the later stages, your time will be wasted, and you will not get the loan either
- There are other criteria too, which vary from lender to lender.
There are plenty of options to obtain small business loans, but you must do a cost and benefit analysis of instant financing and check out if there are any drawbacks. Although the loan is instant, the decision to take that loan should not be instant and thoroughly thought out.