Every business should have working capital to ensure short-term financial stability and operational efficiency. Your supply chain management will have lots of obstacles without a good amount of working capital. Your regular business activities will also be hindered. Thus, you must have working capital with a consistent flow. But, for any reason, you may have a shortage of working capital. Calculate the net working capital you need and apply for the business loan in Bihar. You have to know the steps for an online business loan application to get the working capital.
Choose the type of loan for your business
The present financing market in Bihar and other Indian states offers different working capital loans.
- Long-term loan– You can choose a long-term loan scheme for working capital. It will help you in maintaining a good reserve in the future. You will get a longer period for repayment. Your business will get time to adjust borrowings during that period.
- Short-term– With the short-term business loan in Bihar, you can finance your regular operations. You can manage your inventory, overheads, purchases, and overheads.
- Unsecured– You may look for an unsecured loan to avail of the working capital. You do not need to choose assets as collateral to have funds. That is why it is easy to secure unsecured loans.
We can categorize working capital loans in several ways:
Equity fund from personal resources and investors
Some new businesses with low credit scores prefer equity funding. You can obtain equity funding from your personal resources.
Account Receivable Loan
You will receive a loan based on the value of the businesses’ sales order. Moreover, it is best for an organization that needs funding to fill the sales order. Without a strong reputation and high credit scores, you may not get this working capital loan.
Make sure that you are eligible for the working capital loan
Private limited corporations, self-proprietorships, and partnerships can choose the working capital loan. Moreover, the working capital loan eligibility criteria are different for every lender. Still, the most common criteria are:
- Your age needs to range from 25 to 65 years.
- Your credit rating needs to be at least 700.
- You have operated the business for a minimum of 6 months (3 years in a few cases)
- You must have no previous record of conflict with financial agencies.
Thus, you must check these loan criteria to get the desired net working capital.
Analyze the relevant factors
Before applying for a business loan in Bihar, you have to focus on the most important factors:
Interest rates- Working capital loans are available with different interest rates and it is important to do third-party research to find out the lender that offers you the most affordable rate of interest.
Repayment tenor- The standard repayment ten is about 1 year for the short-term business loan. For long-term loans, leading lenders offer a tenor of up to 84 months.
Processing charge- You need to pay this upfront cost for borrowing the fund. The fee can range from 2.5% to 3% of your principal amount.
Look for essential documents
Before taking steps for the online business loan application, you have to organize the copies of:
- Company PAN Card
- Proprietor’s Aadhar Card
- The business turnover report
- Audit report of the past 2 years
- Income statement of the past
- Certificate of registration and partnership deed
Now, it is easy for you to get a business loan in Bihar to avail of your working capital loan. In some cases, the processing time will be longer due to complicated documentation. The online loan application process removes your concern about the networking capital.
You can avail of a business loan in Bihar from leading lenders on simple terms and affordable rates. One such financial institution is Bajaj Finserv that provides collateral-free business loans with minimal paperwork.