Top Menu

  • Home
  • Write For Us
  • Live Rates

Main Menu

  • Money Exchange
  • Career Advice
  • Home Decor
  • Global News
  • Business
  • Trading
  • Technology
  • Media
  • Home
  • Write For Us
  • Live Rates

logo

Header Banner

  • Money Exchange
  • Career Advice
  • Home Decor
  • Global News
  • Business
  • Trading
  • Technology
  • Media
  • UAE-India flights: Full list of Covid Tests, Lounge Cost at Airports

  • Covid-19 UAE: 10-Day Quarantine Mandatory in Dubai for Close Contacts

  • FinTech Abu Dhabi Festival 2020 kicks off today

  • UAE allows 100% ownership of businesses for foreign nationals starting from December 1, 2020

  • Two men caught leaving London for Dubai with cash-filled suitcases

BusinessFinancial TipsLoans
Home›Business›5 Key Things To Keep In Mind While Applying Business Loans

5 Key Things To Keep In Mind While Applying Business Loans

By Money Exchange News
February 9, 2021
51
0
Share:
Business loan requirements

Business Loans : Business loans provide you with the capital that your business needs. If your business needs investment to expand or is struggling with making ends meet, acquiring business loans is a viable option.

 Even though personal loans are easy to procure, if you’re eligible for a business loan, you have the benefits of lower interest rates than personal loans. Interest rates of business loans have a range of 2%-13% whereas personal loans offer around 6%-36% interest rates. Business loans also have a higher lending limit. But as they involve a higher risk for the lender, they have stricter eligibility requirements. 

Business loan requirements : 

  • Credit score

Professional lenders always check the credit score of the borrower to check if they have been paying back their loans on time. This is just to confirm if the borrower is capable of paying back the loan. Additional background checks can be run on the borrower.

  • Annual income/Cash Flow

The annual income of the borrower must be at least $20,000. For new businesses or startups, the minimum income can be $10,000.

  • Collateral

Collateral-based business loans are way easier to procure as the lender has a guarantee in case the borrower fails to pay back the amount on time. They even have lower interest rates than usual.

  • Assessment of business

The type of business the borrower runs is analyzed. Some businesses have more of a chance of approval. 

  • Existing debt

Any existing unpaid debt is a red flag. Unpaid debt increases the risk for the borrowers and there is a lower chance of approval if the lender has a lot of existing debt to pay back.

  • Age of business

The older the business, the greater the chance of approval of a loan. New businesses have to be evaluated to determine if the business is capable of making a profit. 

Things to keep in mind when taking a business loan :

Taking up a loan is no child’s play. Once you are confident that you are to take a business loan, you must assess the amount that you need.

Borrow too less and you might have to take up another loan. Borrow too much and you might have trouble paying it back. Here are a few things you should be wary of :

  • The amount needed  

An estimate of your financial requirements is the first step to taking a business loan. These include the cost of new equipment, the salary of employees, or even money for renting out a building. 

  • Maintain a good credit 

Make sure you pay your bills on time because your existing bills and payments will be considered by the borrower. If you have been late on your repayments there is a good chance that your loan request will be rejected.

  • Research before applying 

Different banks offer different plans with varying interest rates. It is only common sense to look for the lowest interest rate possible. Do NOT make the mistake of borrowing from loan sharks that provide guaranteed loans but offer very high-interest rates. Every bank is different, there is bound to be more attention provided by small banks. Small banks build up personal relations with their customers. So look around and choose what suits you best.

  • Decide on the collateral

Collateral is provided as a form of security to the lender. Collateral must be of the same or more value than the loan. It is advisable to refrain from choosing a personal residential property as collateral if you have other options available. If you choose your own house as collateral, make sure you are confident in your ability to pay back the loan.

Conclusion: 

If you are to borrow a large amount of money to support your business, opt for a business loan. Mentioned above are the requirements for a business loan as well as things you should keep in mind while applying for one.

TagsBusiness LoanBusiness loan requirementsBusiness LoansInstant Business Loans
Previous Article

UAE’s Non-Financial firms urged to register on ...

Next Article

6 Critical Steps For Responding To A ...

0
Shares
  • 0
  • +
  • 0
  • 0
  • 0
  • 0

Money Exchange News

Money Exchange News Website is a fantastic platform for all our readers as we provide them with an ample of valuable information over a plethora of worldwide topics. It is a real honour for us to publish important news and current updates over matters like Business, Travel, Career Advice, Trading, Investment, Visa Rules, Health Tips and much more.

Related articles More from author

  • benefits of credit card
    Business

    Top 4 Benefits that a Credit Card Offers to You

    October 11, 2020
    By Money Exchange News
  • second income ideas
    BusinessCareer Advice

    4 Side hustles to create additional income sources

    August 25, 2020
    By Money Exchange News
  • Increase Website Traffic
    BusinessDigital Marketing

    Increase Website Traffic: 5 Promotional Ways to Drive More Traffic to Your Website

    December 3, 2020
    By Money Exchange News
  • Caesarstone Benchtops
    BusinessHome Improvements

    Granite Vs Caesarstone Benchtops: Which One Is The Best?

    August 24, 2020
    By Money Exchange News
  • Business loan requirements
    BusinessFinancial TipsInvestment

    How to Identify and Avoid Tricky Financial Advisors?

    December 1, 2020
    By Money Exchange News
  • Indoor plants
    BusinessHome Improvements

    Most Demanding Indoor Plants to Liven Up Your Home Décor

    September 8, 2020
    By Money Exchange News

Leave a reply Cancel reply

You may interested

  • Dubai Metro Red Line Stations Upgraded
    BusinessUAE News

    Three Dubai Metro Stations are getting upgraded

  • Dubai Crimes
    Crime And CourtsMediaUAE News

    Money launderers jailed for 10 years in Abu Dhabi

  • Construction Site Accidents And Injuries
    ConstructionsHealth InsuranceUAE News

    Everything You Need to Know about Construction Site Accidents and Injuries

Recent Posts

  • A Beginner’s Guide to Buying and Selling a Business
  • Dubai Covid-19 Vaccination Campaign: Who is eligible and How To Book An Appointment
  • How to Reconcile your Bank Statement? Step by Step Guide
  • What is Bank Statement? And What is on a Bank Statement?
  • Why Employers do Background Checks Before Hiring

About us

Money Exchange News Website is a fantastic platform for all our readers as we provide them with an ample of valuable information over a plethora of worldwide topics. It is a real honour for us to publish important news and current updates over matters like Business, Travel, Career Advice, Trading, Investment, Visa Rules, Health Tips and much more...
Fully Managed WordPress Hosting on SSD Drive
  • Recent

  • Popular

  • Comments

  • Buying and Selling a Business

    A Beginner’s Guide to Buying and Selling a Business

    By Money Exchange News
    March 4, 2021
  • Dubai Covid-19 Vaccination: Eigiblity and How To Book Appointment

    Dubai Covid-19 Vaccination Campaign: Who is eligible and How To Book An Appointment

    By Money Exchange News
    March 3, 2021
  • Buying and Selling a Business

    A Beginner’s Guide to Buying and Selling a Business

    By Money Exchange News
    March 4, 2021
  • Lights hath may cattle first had blessed god bearing bearing

    By Money Exchange News
    July 16, 2015
  • Home
  • Write For Us
  • Live Rates
© Copyright General News Blog. All rights reserved.