The Indian economy is constantly growing with small businesses. There are more than 50% of entrepreneurs from rural areas who contribute to the economy of the country. However, among them, 41% of business owners face the challenge of getting funds for their business. They struggle because of a few common issues with the banks and thus opt for getting a loan with local lenders. But this takes a toll on their situation as they land paying hefty interest for the loan amount. This is when NBFCs can offer great relief. Just not with the interest rate but these financial institutions provide support in overcoming all challenges faced by entrepreneurs in applying for a business loan.
Let us now discuss the most common challenges faced by entrepreneurs in availing business loans to start or expand their business. Read till the end as there is light at the end of the tunnel and you will understand too.
Most common challenges faced by entrepreneurs in applying for a business loan
In general, every loan application process is a lengthy one. It requires several papers to be submitted and few might be unrealistic expectations according to the business owners. The documentation work will consume time and hence business owners might lose focus on the crux of the business. They will only be looking for all the papers. Also, they may not have all the documents as required by the RBI and hence lose their chance for applying for loans legally. This is when they approach local lenders and these people exploit the condition.
Let us assume you arranged for all the documents. Still, the problem is not solved as the processing time is huge with the lending institutions. You need to submit the documents and they will verify them. It will take time as others might have applied too. 75% of individuals between age 25 and 34 aim at doing business and hence your application is in the queue. By the time you get communication, your competitors will be far ahead. Even if you wait you are not sure of getting approved.
This piece is a real traumatic one and only those who can pledge any movable or immovable assets as collateral. Only by doing this you will become eligible for a loan. Not every aspiring individual will have a property for submitting as security. Sometimes, in the place of documents, you might be asked to provide a guarantee from a person who has status in society. Both the conditions may not always be possible for all.
We would not call this a challenge as preparing a business plan is important for you to let know the lender your vision. They will gain the confidence to give you a loan as you have the potential to repay them. But the challenge is when they ask for a plan that is elaborate. At the inception stage, you may not be able to provide a detailed plan about your business for many years ahead. Here you get struck and your loan application gets rejected.
Place of business
Not all of you might want to start a business in the metro cities. This might be a costly affair and hence you may think of starting one at a place near your home town etc. But getting loan approval for the place you are proposing might be difficult as the lender might not be able to verify or they may not want to provide a loan in such locations. This will certainly put your dream down.
Ok, if at all you cross all the above hurdles and get your loan approved. Still, there is a catch and that happens in the charges and the interest rates. The standard interest rates and charges might be very heavy for the loan amount you seek or the duration you would like to hold the principal amount with you. With a heavy interest rate, you will land in trouble to manage to repay them on a monthly basis.
Thanks for reading till now and I am sure your entire entrepreneur dream is shattered. But, don’t feel that way as you still have a bright chance to apply for a business loan and overcome all these challenges in one go. Do you wonder how? Yes, apply with FlexiLoans and we will wipe out all the issues faced by entrepreneurs in the market while availing a business loan.
We are highlighting our best features to instill confidence in you to apply for a business loan with us.
Approach FlexiLoans and do way with all business loan challenges
- Documentation – We do not ask you for many documents but only a few including PAN card, address proof, ID proof, 6 months bank statement and a brief business plan write up.
- Process time – You need not run around for completing the paperwork and our entire process is online. You can quickly upload the documents as mentioned above and wait for not more than 48 hours to hear from us.
- Security – Nah. We do not ask for a guarantee in any form. You can feel glad to apply for a business loan with us.
- Business Plan – We do ask for a plan but just give us a gist about your plan. You can mention the points in a couple of A4 sheets and that will help. We are not looking for a detailed plan with exact figures.
- Place of business – Again, feel glad that we offer a business loan to start your business in more than 100 cities. Yes, we travel with you to any nook and corner in India to provide you with a loan. Start food businesses or a garment shop anywhere in India and we will provide you the required funding.
- Interest rate – Our interest rates are very flexible and we will discuss with you on the following points. You need not worry about the flat percentage that might pinch your pocket. We will check with you about your CIBIL score, prepayment amount, foreclosure details, loan amount, duration, nature of the business, etc. There is no one factor that decides the charges but many. Hence you can stop worrying about the fees, interest rates or charges in any form. We will make sure your dream comes true.
Moving forward stop thinking about the challenges faced in applying for a business loan. There could be many listed in the market but at FlexiLoans we assure you to approve your loan without any hassles. Apply on our site and get the loan amount in your bank account. It is that easy and you are now ready to start your business.