Key Factors that Affect Business Loan Approval

Financial Support

06 Jan 2021

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Whether small or large, businesses require capital to run their day-to-day operations. Business loans are the best option for business leaders during times of immediate need. But, how will companies get business loans and how long is the approval process. Well, business loans are granted by banks and NBFCs based on specific criteria. The approval process and days entirely depend on the financial service provider you’re approaching for the loan requirements. So, the next question is about the factors that affect loan approval.

If you’re looking to avail working capital loan from financial service providers for running your business operations seamlessly, you must understand the actors that affect the approval. Undoubtedly, if you have everything needed for the loan application, the amount gets credited in three days. Astonishing right? Well, Oxyzo offers business loans in just three days.

Cibil Report and Repayment Capability

You may only be aware of the individual credit report. Well, like individuals, companies also have a credit report and score. The company’s credit report is the history of the credits availed in the past. Same as maintaining a good credit report for yourself, it is imperative to keep good credit history for the company. It is because a financial service provider or bank decides the amount that you’re eligible for based on the company’s credit history and reports. A credit rating is your credit-worthiness as deemed by a credit rating agency once you’ve approached them for a rating.

To maintain a good credit report, get the loan approved fastly, ensure timely repayment of loans, make no default in credit card payment, and ensure no company credit report errors.

Company Property and Assets

Same as company credit report, company property and asset is of equal importance in approval of business loans. The company’s profits and working capital are taken into consideration during the loan approval. Banks offer business loans by taking collateral from business leaders.

However, some small and medium-sized enterprises will not have collateral to submit for approval. At Oxyzo, we understand the problems faced by companies when it comes to offering collaterals. Therefore, Oxyzo offers collateral-free loans up to two crores.

Credit Score

It is comparatively easy to get a business loan if you’ve got a good credit score. In case if your credit score is below 650, it becomes difficult to get a loan. And, some companies approve the loan, but, will charge a higher rate of interest.

Your credit score highlights all the loans taken and repayment capability. If you’ve taken a loan and are repaying on time, the chances of getting the loan are higher. Some credit bureaus that provide credit scores in India are CIBIL, Equifax, Experian, CRIF High Mark, etc.

Business Liquidity

Liquidity or cash flow is another major thing that is taken into consideration while approving the loan. Lenders and banks verify the liquidity status of a business before approving the loan. It is not vital that you must have too much reserve, but you must have a positive cash flow.

Well, most of the financial service providers approve the loan after a lengthy documentation process. However, it is not the same anymore as a company like Oxyzo. We, at Oxyzo, provide collateral-free business loans at lower interest rates.

In cases, you’re considering a financial service provider for starting a new business; you must have a solid business plan. With Oxyzo, you can complete the whole process online and get the loan credited to your account in three days. The number of documents required for availing of the loan is comparatively lower than other companies. Apply today and get the loans sanctioned in just three days.