You might have decided to take a loan to meet your business requirements and have already chalked out a plan in that direction. As you take the financial plunge, CGCL presents the 10 things you must know about SME loans:

1. Only Banks Can Give SME Loans:
This is a common misconception that prevails in the minds of many entrepreneurs. While business loans can indeed be taken from banks, several other financial institutions, like NBFCs, offer a variety of business loans. In fact, alternatives to banks have become more customer-friendly in recent years.

2. Do I Need a Perfect Credit Score to Get an SME Loan?
While a good credit score is always preferred by lenders before approving loans, it is not the sole deciding factor. If a borrower doesn't currently have a good credit score, they should look for institutions that offer loans with their existing score and work steadily towards improving it for better terms in the future.

3. Will I Miss the Bus Due to the Long Time Taken to Get a Loan?
This is another misconception. In the past, traditional business loans from banks took a long time for processing, approvals, and disbursements. However, with the advent of technology and increased competition among lenders, many institutions now offer spot approvals and disbursal within a week. At CGCL, for example, we are committed to making finances available to our customers by completing loan formalities in less time.

4. What Documents Do I Need to Keep Handy?
Running around at the last minute to arrange documents can delay the application process. A little preparation beforehand can prove beneficial to both the lender and the borrower. Documents like PAN, Aadhar card, a passport-size photograph, copies of income proofs such as income tax returns for the last three financial years, registration details of the business, and a detailed proposal on the loan's purpose can speed up the process.

5. Have Clarity of Mind by Asking These Questions to Yourself:
Taking a loan is a significant financial obligation, so it’s important to approach it with complete focus from the beginning. Here are some key questions to ask yourself:

How much loan do I need? (It shouldn't be more or less than required)
Do I have a clear plan for how to use the funds and repay the loan?
Where exactly am I going to utilize the funds, and what are the expected outcomes?

5 Things to Know About SME Loans

5 Things to Know About SME Loans