Raising funds in India has always been a complex task. Companies and different organizations look for options to get business loans but often find it difficult to get them approved. Mostly because either they are not able to complete the required paperwork or they 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 simply fulfill the certain business loan criteria. Therefore, in cases where a business requires immediate cash, they need not worry now.
In short, instant loans can be defined as the loans that can be approved immediately. These business loans do not require much documentation and are easier to obtain. Instant business loans are generally given for a shorter amount of time in comparison to the regular business loans, such as machinery loan, working capital loan, capital loan, and flexi business loan.
1. Opportunity: If a company is getting a golden opportunity or an advantage where it requires immediate capital then it is best to raise it through instant business loans.
2. Payment to Vendors: If a company is unable to pay its vendor then the reputation of your company may be disrupted. To ensure a 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 a decrease in their moral. So, if you find yourself in a position where you are unable to pay your employees, instant loans can be one of the best options for you.
Sources from which you can get instant business loans
If your business plan is strong enough, then you can get an innumerable list of sources to get an instant loan from, which could be:
NBFC (Non-Banking Financial Companies): These type of companies are allowed to take deposits from the public. Hence, they can provide instant loans to individuals who need them.
Venture capital: These type of firms look for a controlling interest to make a relatively large investment they usually provided or early-stage funding.
Crowdfunding: These are basically 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, once you fill in for the strict eligibility criteria it provides excellent customer service.
In order to get any business loan, you need to have a full proof business plan and share your vision and mission with the lender. Your business plan should be strong enough so that the lenders are persuaded 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 further cash flows. You will also need to prepare the financial statement for your company to show the position of your company at that point in time and your projected revenue and expenses and the method of their estimation.
Tips to reach the eligibility criteria to get an instant business loan
- Make sure your business’s registrations are done properly which may include GSTN, company establishment license, etc.
- Tax-related paperwork should be up to date
- Apply for an amount you can afford to repay
- Purpose of the loan should be very clear 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 varies from lender to lender
There are plenty of options to obtain small business loans but it is crucial that you do a cost and benefit analysis of instant financing and check out if there are any drawbacks for the same. Although the loan is instant, the decision to take that loan should not be instant and should be thoroughly thought out.