Fortunately, there are ample options for new-age businesses to scale effortlessly. Instant business loans are ideal in this case.
The word “instant approval” does not imply quick loan approval but as soon as the lender receives the loan application.
Business loans involve much more document screening than traditional loans, and a 10-minute disbursal is too good to be true. Timing of the loan processing and lender terms may differ.
While there is no such thing as an “instant business loan”, you can improve the chances of getting the loan within 24 hours of your bank account. These are often known as short-term business loans.
How to quicken the process of business loan approval?
You can get an instant loan for business up to 5,00,000 for your requirements without engaging in a lengthy documentation process. You can use these instant funds for business purposes like Cash flow management, buying equipment, regulating new HR policies, etc.
As a matter of fact, out of 10, 7 applications get approval.
What is the primary reason?
It is nothing but – not knowing the eligibility and secondary borrowing the wrong amount.
Thus, you should always know the criteria before applying. Here are some ways to ensure a quick loan application approval:
1. Re-visit your financial records
It is something that lenders analyse while addressing your loan application. If you say you cannot review them all as a busy businessman, it would be lame.
Thus, before applying, it is ideal preparing your finances. Re-visit your accounts, tax liabilities, bank accounts, assets, and liabilities to ensure everything is in place.
Set up a strict date every month when all you do is review the finances.
The lender may ask you to present any document given the requirement or the loan purpose. If you cannot produce it, he may reject the application. It may make future borrowing stressful
2. Analyse the lender’s eligibility
Every lender shares unique criteria to provide instant business loans to businesses/startups.
Checking the eligibility before applying helps save you a whole round of rejection, improvement, and re-application. Re-application may impact your credit score.
Thus, always identify the criteria before deciding. Here are the general criteria to qualify for a business loan:
- You are a limited company or Limited Liability Partnership
- Your business bases in any city in the UK
- You have been actively operating your business for atleast 6 months
- You have a minimum turnover of about £8000/ year
- Apart from this, you must share a legal registration of the office space and business license proof to get the loan.
3. Work on your credit history
If you have potentially failed on your liabilities in the past, it would be ideal to review your credit report. Hide and seek would not help. Instead, try to be authentic about your previous credit mistakes.
Identify whether you can pay off some pending debt payments in your credit report.
Loans like- startup loans, invoice financing, equipment financing, and short-term business loans, consider paying or consolidating these loans. By consolidating or refinancing, you can save on interest costs and lower your repayments.
Identify the double entries, CCJs, or bankruptcy status that should not be there on your credit report. Seek immediate removal of these. It will help you improve your credit score and represent a responsible business to the lender.
4. Read other customer’s reviews
It is one of the best ways to shortlist the lender you want to deal with for your financial requirements. It would help you decide whether the interest rates are high or whether the lender possesses the best repayment terms. If you need flexible repayments on your loan, contact the lender.
Contrary to it, if too many borrowers state negative reviews regarding the fund disbursal timing, you may skip to the next lender. It is ideal if you want loans quickly to meet your needs.
Customer reviews are crucial in improving your search for the best direct lender. It is better to invest some time researching the best lender than partnering with the wrong one.
5. Identify the total costs of the loan
If you have researched and shortlisted the lender, identify the loan cost. Instant loans are ideal for fixing a business need within the limited time possible. It is important to identify the total costs along with borrowing rights.
Many lenders help calculate monthly loan charges or repayments. You can calculate additional payments like- missed payment fees, pre-payment fees,
and interest to pay.
You can adjust the scale with different amounts and loan terms to analyse the best term and repayment structure.
For example, if you took out a loan of £45000 for 2 years at 6% interest, your monthly repayments would be £5,400. The repayments could exceed 5420 with £20 missed payment penalty. A lender can charge that for every payment you miss.
Thus, it could increase the overall loan cost. You can either exceed the loan repayment tenure for affordable monthly repayments or seek reduced interest rates.
6. Identify whether a co-signer or guarantor can help
If you struggle or constantly face rejection on your business loan, then getting a co-signer can help. If you need a small amount, then you do not need it.
But to get cash help of over £25000, you would need a guarantor or a co-signer.
A co-signer is different from a guarantor.
A co-signer splits the responsibility to pay the loan repayments equally with the borrower.
It helps reduce liabilities.
A guarantor rescues the borrower when he can no longer make payments. He is responsible for paying the remaining amount. Getting a guarantor can help fetch lower interest rates and reduce the overall loan costs.
7. Ensure a clear plan to use the amount
Deciding the loan purpose is one of the most important tasks. It involves developing the strategy to use the loan amount and repay the lender. An exit strategy in place can help you qualify quickly.
Bottom line
These are some important things that a business should be familiar with while applying for instant business loans with lenders. Analyse the requirement and borrow a flexible amount for your needs. Do not forget to calculate the exact costs and repay the loan timely.
Emma Anderson is a highly accomplished Editor-in-Chief at 24cashfinances, renowned for her exceptional expertise in the finance industry. Holding degrees in Finance and Marketing, Emma has developed a deep understanding of the financial landscape, particularly when it comes to loans and personal finance.
Emma’s professional journey began as a financial analyst, where she gained hands-on experience in evaluating market trends and analysing investment opportunities. Emma’s enthusiasm for writing and her goal to educate and give individuals a voice motivated her to move into financial journalism. Her work has been published in popular magazines and she has produced thought-provoking pieces on various financial topics.