A self-employed businessman faces the dilemma of opting for the personal loan or business loan when he needs it. Normally a loan that covers self-employed business, if it is a personal loan is an unsecured one. Before you get a personal loan for the self-employed business you need to be sure of the kind of business you are in and the type of business you are in. Before any lender sanctions the amount of money it will ask you the purpose of your borrowing and the kind of business you are in.
It is mandatory before you take a personal loan for a self-employed business that you ensure that your business has a touch of vintage and has a clean credit score. If you want full-time support for your self-employed business from the lender, you need to ensure the fact that you have a good rapport with the lender and that they can rely upon you. Every lender will grant you the loan only when they are able to make sure that you will repay back their money.
Before we go into the intricacies of securing a loan for a self-employed person, we need to differentiate between the kinds of loans that one can secure. A business loan is one that enables even a single individual to secure a loan for his company, depending on the kind of company he owns: proprietary or in partnership or limited. A personal loan is one that is lent to an individual for his personal needs. However often lenders are lenient when it comes to personal loan for self employed business. And thus in the process, they don’t categorize the loans and only question about the kind of business you are in and the amount you would need in the process.
Here are a few things to remember on how to get a personal loan for the self-employed business:
- Keep your taxable income papers in check: Lenders are most likely to ask about your income tax revenue when they are going to give you a personal loan for the self-employed business. It is extremely essential that you take the paperwork of the taxable income organized and pay your returns accordingly. In the long run, if you avoid such payments, you might gain a little extra money for a short while, but if your record is not very clean you will have problems in securing loans for your self-employed business in future. The ITR of your company is not the only thing that matters. But your individual record of taxable income payment should be clean as well. Most lenders will ask you to produce ITR for the last three years and you must be able to produce it and submit it to them.
- The older the business the better: Make sure that your business is at least three years old so that the lender is sure that the business is reliable and stable. Lenders are most likely not very positive about a loan for a self-employed person if the business is seasonal or volatile. Make them trust you. Tell the purpose of your business and make them aware of its kind.
- Be Comprehensive about your business: Give them a detailed account of the income and the profits you make annually. Lenders are sometimes really strict and have a mandate of 5 lakhs of profit. However, there are lenders that are as lenient as setting a mandate of 2 lakhs of profit. No matter what, it is very important to make them aware of the disposable income your business makes. The gross revenue is also equally important. Most lenders don’t lend money to self-employed businesses that don’t make a sum of 50 lakhs annually. However, some lenders are equally supportive and provide personal loan for a self-made business that makes an average of 12 lakhs annually.
- Compare your sources: Apart from this, you need to be sure of the kind of lender that provides the loan you need. Compare the lenders that provide best business finance, and go for the ones that have low-interest rates and have a hassle-free process. You can always use the internet for this purpose. It’s important for the online portals of these lenders to be aware of the guidelines.
Lenders like Bajaj Finserv provide hassle free loans to small and medium business with a loan value of up to Rs.30 lakh at low-interest rates. It is one of the most reliable lenders that enable you to get easy loans in a short notice of only 24 hours by producing only 2 documents.