Kick Start Your Business with Self- Employed Business Loan
It is a good idea be your own boss by starting a business. You are neither answerable to the person about your time management or performance. You just keep away from answering the same boring questions to superiors. Taking a decision to become your own boss has its disadvantages too. You may have to go through tight cash flows as it is difficult for you to get the business loan when you are self-employed. The lender finds it difficult to assess your income proofs and business stability in future so, fetching a business finance is a time taking process when compared to other types of loans. It is not impossible to get a commercial loan for your business but, you should be patient enough to undergo the lengthy process and huge documentation. Keep reading to know to pave a smooth sailing to get financial aid for business.
This is the most important criterion on which the lender offers commercial finance for your business. A self-employed person needs to submit more documents to help the lender assess income and check the eligibility when compared to salaried people. Few business documents that are needed by the lender include
- Bank statements of past 6 months
- IT returns of past two years
- P&L account and balance sheet for past two years
Good credit score
Unlike any other loan process, the lender will look at your credit score issue the loan. In the case of commercial loans, he will assess both your business credit score and personal credit score to know your money management skills. You should maintain a good credit score by paying off your credit card bills EMIs for your existing loans (if any). Maintaining good credit score will smoothen your process of getting the commercial finance for your business.
When to apply?
Most of the business owners think of going for the business loan when there is a financial crunch in the business. On the contrary, apply for the loan when the business is doing well to improve your chances of approval. Money is an all time need in the business, take a loan when it is doing well if you are planning for expansion. The lenders consider income of past two years to approve a loan.
Where to apply?
You will always have a good chance of the business loan approval if you apply it with the bank where you carry regular transactions. As the banks know your credit worthiness, the chances of approval for your business loan will be on rising. The bank also will have knowledge of your regular cash flows which will increase the chances of loan approval.