Business Loan for Startup: How to Get the Funding You Need

Whether you are planning to set up a new business or are already running one, you would need access to funds to be able to hire staff, undertake product innovations, expand operations and essentially realize your vision. Getting funds to run a start-up is far easier than it was a decade ago. Today, there are hundreds of venture capitalists (VCs) on a lookout for investment opportunities. Unfortunately, the VC money comes at a cost. If a VC invests in your company, they will take a major stake away from you. Thus, if you have an idea and you are convinced that it could be a big one, you can consider availing yourself of a business loan, especially during the initial phase when the requirements of your business do not demand an exorbitant amount of money. These days, business loans are quite readily available. However, lenders sanction these loans at high interest rates. If you own a property that you are not using, you can avail of a loan against property to avoid paying exorbitantly high interest rates. Loans against property come with zero end-use restrictions. Thus, borrowers can use the money as they please, even to start a business.

Need money to start your business? Follow these steps to avail yourself of a business loan.

1. Decide the Type of Loan You Want

If you need money to run your business and are planning to avail yourself of a loan, the first thing you must do is decide the loan product you want. One can avail a business loan, term loan, loan against property, etc. to take care of one's business requirements. So, the first step is deciding the loan product that would work best for you.

2. Select Your Lender

Once you have decided the loan product you want, the next step is to decide the lender. Borrowers must choose a lender who has been in the market for some time and has a good reputation. They must also choose to go with the lender offering them the best terms and conditions on the loan. Choosing the right lender will take some time and effort. You will have to reach out to lenders and get quotes from each of them.

3. Check if You Meet Your Lender's Loan Eligibility Criteria

Before beginning the loan application, go to your chosen lender's website and check if you meet their loan eligibility criteria. If you do not qualify, do not apply for a loan or you might get rejected and a loan rejection will dimish your chances of getting approved for a loan with another lender. If you do not meet the qualifying criteria, work on your profile first and then apply for a loan.

4. Make a Loan Application

Once you are done with step 1 to 3, go ahead and apply for a loan. Please go through the list of documents required for property loan that you will need to apply for a loan online. Keep all the documents ready to experience a hassle-free process.

5. Wait to Hear from Your Lender

After you have applied for a loan, your lender will take a few days to assess your loan application. If everything looks okay, they will approve your loan application.

6. Sign the Loan Agreement and Wait for Disbursal

If you lender approves your loan application, they will send you a loan agreement detailing out details, such as loan amount, loan tenor, rate of interest, type of interest rate, etc. If you agree with the loan terms and conditions, sign the agreement, and wait for the loan money to be disbursed into your account. If you are not happy with the loan terms and conditions, you can initiate another round of discussion with your lender.