“Money is not the only answer, but it makes a difference.”
– By Barack Obama.
Right from the moment an entrepreneur thinks of starting a business, needs of fund inevitably arises. As the business grows, funding requirement also increases.
To build a better and strong business, owners need to often start with business loans.
Borrowing money will have a long-lasting impact on your business. So, before applying for a business loan, you must avoid these 7 common mistakes:
- 1. Not proper maintenance of business records: To have the exact idea of the financial situation, you must learn the basics of accounting, keep financial records in a systematic manner & manage your cash flow carefully. In absence of these, you can’t forecast your financial needs properly.
- 2. Choosing the wrong financier: Nowadays, business owners have various fund-raising options than ever before. So, don’t hurry in taking borrowing decision. Compare all the loan offers & its repayment terms carefully.
- 3. Don’t borrow more than you can afford: It is not always a wise decision to borrow additional money just to have a cushion. Take a conservative approach, while applying for a loan. Failure to repay any amount will have a negative impact on your creditworthiness and future loan application(s).
- 4. Unnecessary Loans: Sometimes entrepreneurs borrow money just for the sake of it. If you can work without latest equipment or shifting to lavish location, then avoid it. Take help of finance experts to arrive at accurate financial projections.
- 5. Poor Planning:Usually, entrepreneurs are so occupied with the daily operations that they fail to plan for future. Generally, they wake up at the time of emergency. So, they have very little time to arrange the funds to meet the requirements.
- 6. Miscalculation of charges:The business owners generally sign the loan documents (application form, loan agreement etc.) without even reading it. Apart from loan amount, there are other charges involved such as processing fee, prepayment, foreclosure, renewal etc. Before disbursement of the loan, you must discuss all these points with your financier.
- 7. Dependent only on traditional lenders:Apart from Banks and NBFCs, now you have the option of Fintechs to arrange a loan for yourself. They provide online platforms for various requirements such as fund-raising, payments etc. Here, you can get a business loan in quick and hassle-free manner.
At CapitaWorld, we help all entrepreneurs to succeed and thrive. No need to run after any Banks, NBFCs or Financial Institutions. You can upload your documents online & get a loan up to Rs. 1 crore. Our Knowledge Center Team will assist you at every stage of the loan.
If you still have any query regarding the business loan, you can call us at 9512015768 or write an email to firstname.lastname@example.org