Do entrepreneurs dream of their businesses flourishing? Yes, of course, they do. As a business owner, growth is always on the mind, and hence, you would want to capitalise on every opportunity presented. Now, in some cases, you might require additional financial support, where borrowing business loans becomes essential.
Essential elements like interest rates and eligibility requirements can have a significant impact on borrowing these loans. Understanding them can bridge the gap between your current resources and your future goals. Therefore, today, let’s debunk some common myths flying in the air about business loan interest rates and empower you to make informed decisions.
Are All Business Loan Interest Rates Created Equal?
When it comes to business loan interest rates, there is a common myth about their consistency across lenders and loan types. Therefore, it’s important to consider several factors regarding them. Here are a few pointers based on which lenders decide on different interest rates:
- Loan Type: There are many business loans, and each has different interest rates. For example, if you borrow a personal loan for your business, it’ll have a different interest rate in comparison to term loans or working capital loans. This is because lenders take on less risk depending on the loan type you’re borrowing.
- Your Business Profile: A strong business plan, good credit score, and established financials can lead to a more favourable interest rate. Lenders see these factors as indicators of your ability to repay the loan, and your credit score plays a big role here. It is simply a score based on your borrowing and repayment history.
- Loan Provider: Different lenders have varying risk appetites and operational costs, which can influence their business loan interest rates. Online lenders, for example, may leverage technology to streamline processes, potentially leading to more competitive rates.
Is Flawless Credit Score Crucial for a Favourable Business Loan Interest Rate?
Yes, having a good credit score is definitely a plus, but it’s not the sole deciding factor. It’s the second and prevailing myth when it comes to obtaining favourable business loan interest rates. Here’s why:
- Business Potential: A strong business plan demonstrating a clear path to profitability can significantly improve your chances of approval, even with a less-than-perfect credit score.
- Financial Health: Solid financial statements showing consistent revenue and responsible financial management can reassure lenders of your ability to repay the loan.
- Age Eligibility: Be mindful of age limitations because business loan eligibility may vary depending on the lender and the specific loan product. The range typically falls between 21 and 45 years old or even 55 years old for certain loans.
Favourable Business Loan Interest Rates Have Longer Approval Time
The last big myth about securing favourable business loan interest rates is that they may have lengthy approval processes. However, things are changing for good and unlike traditional banks, the process has become better. Here’s what has changed:
- Online Lenders: Many online lenders leverage technology to streamline applications. They allow for faster processing and quicker decisions on your loan request. This means the turnaround time is also less, thereby promoting quick fund disbursement.
- Focus on Efficiency: The application process is often simplified, requiring hassle-free documentation. By offering a more user-friendly experience, borrowers are required to submit all the essential documents digitally.
Business Loans Made Affordable
With these myths debunked about business loan interest rates, whether you’re an entrepreneur or owner of an established business, you can secure one confidently. You can get them from digital lending platforms like KreditBee. They are one of the popular ones in the industry, and using their platform, you can borrow business loans anytime, anywhere online.
What makes them an even better platform for business loans is their simple eligibility criteria. You must be 21 years or above, an Indian resident, and must have a ₹10,000/- monthly business income.
So, what’s keeping you from visiting KreditBee’s official website to learn more about their loans for businesses? Secure favourable business loan interest rates today!