Pre-requisite for Equipment Loan
Three Years of Business Existence: To ascertain the business continuity and the performance of business, Banks/NBFCs usually don’t fund green field project unless backed by renowned investors.
Good CIBIL Rating:Credit information Bureau India Limited in a rating agency which maintains and rate your credit risk which lenders use to assess your credit history and determine your eligibility basis your current exposure and track record of the past re-payments on loan. Excellent credit history is the pre-requisite to determine your loan eligibility.
Excellent Business Plan:End use of funds will be sought for and so will be the projected business from the funded amount, most of the times the money is funded directly to seller than into company account, unless it’s a reimbursement of equipment already purchased. For all the above terms to be met, we need to have an excellent business plan. Your entire business plan should be finalized in few paragraphs, giving the crux of business
Directors Profile/ Company Profile: All lenders seek company’s profile to have insight about the company’s vision, products line and major clientele’s. Educational background and experience of promoters are sought to make sure about the person behind the business.
Cash Flows: Financial records confirming the money coming in and money spent is asked, before equipment loan is sanctioned. This is predominantly done to check if the money is invested in business and there is no diversion of funds. Ethical financial reporting is what lenders consider while funding small business loan requirement.