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Business Loan for Self Employed: Purpose and prerequisites

In order to get a business loan approval, getting the below criteria’s satisfied is much needed to get the business loan. Read more to know about the criteria fulfillment and the main purposes of such loans.

Every business needs financial help in order to grow. There are a number of reasons for applying for a business loan. Some of these include business expansion, purchase of raw material, restocking of the inventory, clearing the existing debt, upgrading the machinery, funding the operating cost and many others. While applying for such loans, one needs to know the prerequisites in order to be eligible for the same, which comprises of:

A good credit score: For a self-employed to get a personal loan, he/ she should have a credit score of 750 or more.
Eligibility criteria: To be eligible for a personal loan for self employed, the business should be operational for at least 3 years and age of the owner should be between 25-55 years.
Documents fulfillment: One should have complete documents related to KYC, financial statements, MOU, GSTN, Income tax etc., in order to complete the loan process formalities.
Reduced Debt to income ratio: The lender need to ensure that the expenses to revenue rate stands at 50% to sanction the loan.

The owner should also keep few things clear in mind before applying for the business loan. These include decision for the loan amount to be not more than Rs.30 lakhs, additional benefits offered, the loan tenure, interest rate, and others.
Read Also: How Self-Employed Individuals Can Get a Business Loan

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