Now let’s talk about 8 steps that will help to get Business Loans in COVID-19’s Crisis:

1. Find out if you’re qualified for a business loan

It depends on two factors to qualify for a business loan. 

1. Business running time 
2. Repayments

• Business Running Time

Lenders will take into account how long the company has been in operation. Many online small-business loans require a minimum of one year of business experience, while most bank loans require two years.

• Repayments

Examine your company’s financial books, particularly cash flows. Determine how much you can afford to put into debt repayments per month. Be sure to account for the fact that specific online lenders demand regular repayments.

2. Determine the sort of loan you need

Lenders inquire as to whether you require a small . The answer most likely falls into one of two groups that will help you decide which form of business loan is best for you:

• You want to start your own business: Lenders expect cash flow to sustain debt repayment, but businesses in their first year are unlikely to approve a loan. You’ll just have to focus on alternative sources of venture funding, such as company credit cards and personal loans.
  
• You would like to keep track of your day-to-day expenses: A business line of credit may be a good idea. This type of flexible lending allows you to access funds if required to meet expenditures such as salaries or additional costs such as maintenance, providing a convenient safety net as needed.

3. Credit Score

Several of the instruments lenders assess a borrower’s reputation through credit reports. If the credit report reveals a pattern of late payments, you can be turned down for a loan. Any of the three major credit bureaus, Equifax, Experian, and TransUnion, will provide you with your credit history for free. Banks tend to sell low-interest business loans to customers who have a minimum credit score of 700. Before applying for a business loan, you can also improve your credit score and pay off any loans.

4. Compare Small Business Loans

Small-business loans can be obtained from two different sources: online lenders and banks. Each usually has many products, although one can be superior to others in some situations.

You can get a business loan from an online lender if: 

• You don’t have any assets to put up as leverage
• You need financing right away

These lenders’ APRs are not as small as those offered by conventional banks, but acceptance rates are higher, and financing is quicker than 12 hours as compared to banks.

5. Loan Papers Documentation 

Make sure you have all of the required documents before applying—the method of obtaining a collateral free business loan streamlines if the authorities can check the files hassle-free.

You need to apply a variation of the below:

• Tax reports on both businesses and individuals
• Bank statements on both your business and personal accounts
• Financial statements for a company
• Documents of business law (e.g., articles of incorporation, commercial lease, franchise agreement)
• Business Proposal

6. Cash flow

When it comes to assessing the stability of your business, cash flow – a calculation of how much cash you have on hand to repay a loan – is the very first factor lenders will look at. Inadequate cash balance is a weakness that so many lenders cannot afford to ignore. As a result, it’s the first thing you can think about before determining whether or not you could even afford a loan. So, before applying for a loan, check your cash flow, especially in COVID’s crisis which plays an important role.

7. Choose the Right Lender

Micro, small, and medium businesses now have the benefit of selecting a financier from a variety of alternatives. However, the current market’s large number of lending firms also presents an option dilemma, which can potentially confuse business owners.

Towards that point, business owners must examine the interest rate, terms and policies, eligibility requirements, and EMI volume offered by their lender as in today’s time, more than 80% of loans are rejected by financial institutions due to no credit history or collateral. So, here, FlexiLoans comes into the picture, an online lending platform that helps you get the money you need for your business without any hassle and less paperwork.

8. Business credit cards

With the advent of start-up businesses in recent years, credit cards for commercial purposes have increased. Unless the start-up doesn’t need the huge sums of money in the early stages of operation, you can use credit cards for purchases and repay the balance on time to reduce bankruptcy or penalty interest rates. 

Final Words

As a small businessman, you may frequently find yourself curious about the best possible way to finance a specific business need, particularly in COVID-19 environment. Don’t worry because FlexiLoans is your new saviour. You can now quickly get a business loan, given that you meet all the desired criteria. If you plan to expand soon, you’ll almost certainly require outside funding. You will be unable to take advantage of business prospects if you stay without external financing for an extended period.

The post 8 Steps That Will Help You to Get Business Loans in COVID-19’s Crisis appeared first on FlexiLoans Finance, Business Loan Blogs, Tips & Guide.

In India, a Kirana Market, also known as a nearby departmental store, is a small neighbourhood store. All household items are sold in these shops. The size of every shop is determined by the amount of money available to a local Kirana. However, whenever it comes to expanding their sector, they will need additional financial leverage, mostly in the form of a loan. 

Now let’s talk about 5 Outrageous ideas to get business loan for kirana store:

1. Government Business loans Schemes: MSME Loan in 59 Minutes

The Government of India launched this program, also known as PSB Loan in 59 Minutes, in which it unveiled a fast business loan platform for those who need to extend their current business. MSMEs will get loans from public and private sector banks and NBFCs for sums ranging from INR 1 lakh to INR 5 crores in less than 59 minutes at 8.50% under this scheme (Non-Banking financial companies). MSME Loans in 59 Minutes provides the financial services you need in a timely and efficient manner.

2. Cash Flow Management

An investor must ensure that loans are repaid on time. The cash flow numbers represent your company’s liquidity situation. Examine the debt service coverage ratio in detail (DSCR). It emphasizes the amount of cash you have on hand to pay off your debts. Here are several things you can do to boost your cash flow and raise your odds of getting a small business loan:

• Enforce payment management
• Eliminate needless spending
• Pay invoices in the company’s name
• Cut costs whenever required

3. EMI Calculator

When applying for a small business loan, you must consider your borrowing options. A potential creditor must have a detailed repayment plan in place. This business loan EMI calculator will assist you in devising a repayment plan. Your EMIs should not put a strain on your current financial situation or liabilities. It saves a lot of time and money if you plan and keep things transparent in the loan application process. You’ll be one step closer to getting your if you follow the above steps.

4. Boost Your Credit Score

Your credit score is used by investors to assess your financial reporting abilities. It’s important to keep in mind that when you’re looking for business financing, the lender may still look at your credit score. A decent credit score serves as a tool for increasing lender trust and a prospective borrower’s image in the lending industry.

5. NBFCs

It would be hard to obtain loans from private or public sector banks if you are new to banking and do not have a financial background or credit score. You can get business loans for your startup by approaching Non-Banking Financial Companies (NBFCs) despite getting a credit score or financial background. Even you don’t have to comply with a long list of eligibility criteria with NBFCs.

Here are some operations for which you can use a business loan for Kirana store:

Renovation of a Store

The majority of Kirana Business owners need their establishments to stand out. As a result, they devote a significant part of their earnings to the shop’s repairs. However, if you are low on cash, you could take out a business loan to renovate the Kirana Shop. So when the shop is repaired, that entails the cost of labour, supplies, and everyday loss. As a result, a business loan will be used to cover all of these costs.

Creating a New Business

Many company owners own several Kirana Stores and want to expand their operations. So, if you want to expand your business by opening more Kirana Stores in your neighbourhood, you can get a business loan to do so. You can use the loan money to purchase more items for your new store.

Purchasing and Storing Equipment

Milk and curd goods should be kept in a cool place. A business loan will assist you in purchasing Deep Freezers or other refrigeration facilities for storing milk items. You can also add new counters or shelves for your Kirana Store to make it more appealing.

As your business grows, it stands to reason that the strength of your workforce will grow as well. You’ll need to find additional employees to pay them their wages. As a result, a business loan for local kiranas will assist with managing the costs of new employees.

Final Words Small business loans have been an essential aspect of modern business, with the majority of them provided for local kiranas to finance their short and long-term needs. After all, with a large number of local kiranas looking to convert their plans into practice with the small capital available, obtaining such a loan can be difficult. So, to take advantage of those attractive features & benefits, apply for business loans with FlexiLoans. Check for business loan interest rates & documents required for business loan.

The post 5 Outrageous Ideas for Getting a Business Loan for Local Kiranas appeared first on FlexiLoans Finance, Business Loan Blogs, Tips & Guide.

What exactly is KYC?

The KYC procedure is mostly conducted by banks. It is the mandatory process of identifying and verifying the client’s identity when opening an account. As per Reserve Bank of India (RBI) notification, from 2004, all banks should mandatorily complete the customer KYC process.

What distinguishes video KYC from regular KYC?

People may complete their KYC for financial transfers and other related activities in several ways. As previously mentioned, the RBI, SEBI, IRDA, and other regulatory bodies use the Know Your Customer (KYC) system to authenticate consumers. Video KYC is far better than regular KYC as it can be done from our home. It is time-efficient. It just takes 5 minutes to complete a video KYC.

The process of video KYC

The RBI approved the use of the Video-based Customer Identification Method (V-CIP) for achieving paperless KYC. Individuals can do remote KYC via video call from the comfort of their home. Unlike conventional methods, the banker verifies the records, performs a liveliness search, and determines the person’s location through video call.

Video KYC Guide: Regulatory Requirements

• A live video of the customer.
• Offline Aadhaar Verification.
• Customer’s original PAN card.
• PAN card verification from database.
• Geo-tagging to ensure the customer is in India.
• A photograph of the customer would be compared to the government IDs.
• Video to be encrypted with the date and time stamp.

Process of Video KYC:

• A customer has to visit the bank’s website and schedule a video KYC.
• The customer will get an automatic text message or email containing a joining link.
• He or she has to join a video call with a bank representative.
• The bank official will do OSV verification of the consumer’s original government documents.
• Customer address validation will be done using his or her live location. 
• After successful Video KYC, the consumer will be notified via email and text message.

Advantages of the video KYC process

Several banks and lending agencies have begun to introduce recommendations for a successful video KYC procedure. The video KYC mechanism can be used for various items, including remote onboarding of savings account customers or net banking customers. A large number of non-banking lenders are now in the process of putting the system in place.

• Video KYC enables real-time customer verification through facial recognition and automatic data retrieval.
• Artificial Intelligence is used to quickly onboard clients.
• Onboarding expenses are reduced by 90%. Video KYC significantly reduces the time taken for client onboarding. 
• It significantly reduces paperwork. That will also aid in the elimination of human errors.
• It saves a lot of time because it can be completed at any time and from any place. The customer’s physical appearance is not needed. He or she just needs a smart device with a camera and a stable internet connection.
• It will also enable businesses to use the same KYC for various items, such as opening bank accounts and loan applications.

What are the benefits of the video KYC process in different business verticals?

Private and government Banks

You may have come across a KYC form. You need to complete the KYC process for getting full account access. Without KYC, the customer won’t be getting full benefits, and some banks won’t allow opening an account. These procedures are a legal necessity for banks to discourage money laundering and identity theft. A Video KYC system not only allows customers to complete their KYC at a convenient time and place but also simplifies and speeds up the process.

NBFCs & MFIs

The video-based customer identity process is making hassle-free banking a possibility for the fintech industry. It allows institutions to perform remote onboarding. It also reduces the time taken for customer onboarding. Furthermore, in the present pandemic situation, video KYC eradicates physical contact, reducing the chances of virus transmission.

Wrapping up

Video-based KYC is the safest and most effective method of authentication as it does not require any human intervention. It is solely based on technology, and it assists fintech firms in lowering costs and enhancing performances. Even during the pandemic situation, a video KYC facility allows consumers and lenders to establish new banking relationships easily and securely, with no physical contact.

The post A Complete Guide to understand the process of Video KYC? appeared first on FlexiLoans Finance, Business Loan Blogs, Tips & Guide.

Vendor Financing Benefits

• Risk-free loans: There is no need for collateral & minimum documentation to avail of the loan. 
• Hasslefree repayment tenure: The repayment tenor of the loan can go up to 12 months on invoice tenures of 30 to 120 days. 
• Leverage FinTech Features: Harness the benefits of the latest technology for faster application processing and assessing creditworthiness. 

• Substantial Loan Amount: Get a loan amount as high as INR 2.5 crore, or up to 90% of the invoice value. 
• Pay Loan Through Profits: One of the biggest advantages of vendor financing is no need for upfront payment. You can make payments from the earnings of the product sale. 
• Minimum Personal Funds Requirements: As a business owner, you just need to pay the downpayment. Beyond that, you can leverage the business profits to repay and other debt. 

Types of Vendor Financing

Based on the repayment option, there are mainly two types of vendor financing. These are: 

1. Debt Financing: If you agree to pay the lender in the form of interest rates on the loan amount, it is termed debt financing. 
2. Equity Finance: If the repayment is made to the vendor in the form of the company’s share, inventory, or services, instead of cash, it is termed as equity financing. This option is more suited for start-ups or small businesses. Equity financing is also known as inventory financing.

Vendor Financing Eligibility

In order to avail of the loans under the vendor financing scheme, there are a few things that you must have. These are:

1. The age of business must be more than 1 year from the date of registration.
2. Should be a supplier of a reputed organization.
3. Must have a valid work order, invoice, or purchase order of more than INR 1 lakh.

Documents required for Vendor Financing

• Details of the business profile and projection
• Know your customer (KYC) documents
• Financials of last 2 years
• Current account Bank Statement of last six months

Who Should Avail Vendor Financing?

Vendor financing is useful for all those business owners who have received a big order from any corporation, and need the initial funding to knee-jerk their supply chain cycle. Businesses can get financial aid after signing the deal and making the initial deposit. After getting the funding, the borrower needs to repay the sum within a predefined period.
Conclusion

However, along with these numerous benefits, there are some limitations of vendor financing as well. One of the biggest drawbacks is higher rates of interest. As a business owner, you must strike a balance between the pros and cons before opting for vendor financing.
At FlexiLoans, we leverage AI-based technology to process the applications for faster & hassle-free approval. Get in touch with us and avail of vendor financing of up to INR 2.5 crore. .

Frequently Asked Questions Related to Vendor Financing

Q. What is the interest rate in vendor financing?
A. In the case of vendor financing, the rate of interest is dependent on a number of factors, like business requirements, loan amount, repayment period, nature of the business, the relationship between the vendor and the business owner, and so on.

Q. Can I avail of vendor financing with a bad credit score?
A. Yes, it is possible to get loans under vendor financing with a bad credit score. However, the rate of interest levied will be higher compared to other business loans.

Q. Can I use corporate bills and invoices as collateral for vendor financing?
A. Yes, you can always submit corporate bills and invoices as collateral to avail of credit guarantee under vendor financing.

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