Category: Business

6 Easy ways to keep your Credit Score Eligible for Business Loans

As a small business owner in India, you probably know that keeping a sound credit score is integral for securing a business loan. This is because it tells the lender how trustworthy you are. A high credit score indicates that you pose minimal risk to the lender. So, getting a business loan approval would be a breeze, provided you meet the other standard requirements of the lender – such as annual revenue and overall business experience.

A low credit score, on the other hand, will make it very difficult to get an unsecured business loan, even if you meet or exceed the other requirements.

Exactly, what is a good credit score?

The credit score scale ranges from 300-900. Anything above 750 puts you in good stead to secure a small business loan in India.

How can you check your credit score?

In India, there are six primary credit bureaus to perform credit assessments. They are CRISIL, CIBIL, ICRA, Equifax, CRIF High Mark, and Experian. You can log into any of their websites and check your credit score, before you apply for a small business financing loan.

What can you do if your credit score is low?

A good credit score is the first thing a lender looks for in your business loan application. It is a measure of your ability to clear your debts on time, based on your past transactions. A poor credit score or the lack of one severely dents your chances of seeing the stamp of approval on your business loan application form.

But it is not the end of the road. Even if your present credit score does not cross the threshold mark, there are ways you can rely on to improve and maintain it.

Let us look at 6 of the most important ways:

1.    Keep Regular Tabs on Your Credit Score

Many people make the cardinal mistake of checking their credit score right before they are in need of easy small business loans. This might not give them enough time to deal with a negative remark on their credit score report. On the other hand, checking your credit score periodically – once every 4 or 6 months – will give you ample time to take the necessary steps to counter situations like these, much before applying for a finance for business.

Also, there is a misconception that checking your credit score affects your rating. The reality is when you check your credit score, it is considered a ‘soft inquiry’. Unlike a ‘hard inquiry’, a soft inquiry does not affect your credit score and is not visible to lenders.

2.    Pay ALL Your Debits Timely (even the ones you consider small or insignificant)

Your unpaid debts – credit card bills, EMIs – can be a major roadblock to your application for finance for a business. Any payment defaults will drag your credit score down. Be it a cash crunch scenario or a case of missing the due date, you will eventually lose out on getting a small business loan.

So to avoid such scenarios, ensure that you set reminders for all your monthly payments. You can turn to technology such as mobile phone applications to assist you in this regard. As far as cash crunch scenarios are concerned, effective budgeting beforehand can help you stay out of it.

3.    Avoid Simultaneous Loan Applications

Applying for small business financing loansto multiple lenders in a short time span reflects poorly on your credit score. In such cases, your credit score report will throw up multiple “hard inquiries” – inquiries made by lenders, which will adversely affect your credit score. To a prospective lender, you will come across as a credit hungry person.

Multiple business loan applications can also indicate that your debt burden may increase in the future – a red flag for lenders.

4. Be Wary of Joint Loan Applications

To increase the chances of a business loan application being approved, many turn to joint loan applications for business capital loans. Although this method does improve your chances, what you may miss is a possibility that your co-applicant makes a mistake leading to a default in payment. This will affect your chances of getting small business loans online.

5.    Keep an Eye on Your Credit Card Utilisation

For all your credit cards, you have to adhere to one simple rule – do not allow your card utilization to breach 30% of the total credit card limit. This will keep your credit scores stable. A high credit utilization limit can also indicate the possibility of a looming debt burden. If your credit utilization is high, take steps to lower it. Be financially disciplined and avoid using your credit card for all your purchases. Excessive usage allows the lender to look at your spending habits, something best kept to yourself.

A tip – Ask your credit card company to alert you if you are closing in on the utilization limit.

6.    Take A Loan

At first glance, this may seem counterproductive. But, it is actually a very effective way to boost your credit score. This is especially handy if you don’t have a credit score at all. Remember –having no credit history doesn’t qualify you as a good candidate to receive a quick business loan. This is because the lender will have no idea if you can repay on time.

So, take an easy business loan; an unsecured business loan is a better option if you don’t want to risk mortgage. Pay your instalments on time, and if you can, try to close the business loan early. This will help you build your credit score.

5 Ways to Get Small Business Funding in Mumbai

The availability of finance for business is a recurrent factor in starting or sustaining any business. Apparently, however, according to a recent survey, statistics show that over 94% of the small businesses take a back seat due to ignorance in exploring various opportunities when it comes to finance for business.

That’s often the case, at almost every stage, entrepreneurs end up asking the question—How do I finance for business?

Moreover, Mumbai is famously known as the financial capital of India. Accordingly, the problem of weak bank balances in a big city like Mumbai is a grave for small and medium enterprises.

In a metropolitan city, the competition is huge due to the rapid multiplication of commercial ventures. Survival of the fittest is a norm, where access to quick and easy small business loans will determine the success for SMEs.

Here are some options to get easy small business loans for your business.

1.Bootstrapping your business:

Bootstrapping, otherwise known as self-funding is the most viable way to start your small business. As opposed to the various easy small business loan options available, this is the more effective for the first-time entrepreneurs.

Bootstrapping is also about stretching resources – both financial and otherwise – as far as they can. You might want to start early, implementing your money-saving plans to reap out the benefits.

2. Financial Help from Microfinance Providers or NBFCs:

There’s another way if need a loan for new business. Basically, this is a lucrative option, if you don’t qualify for a bank loan.

So, if you need a loan for new business, and you’re limited and credit ratings not favored by the bank, this is it for you.

3. Government Programs for startups:

There’s no shortfall in small business financing loan opportunities from the government.

The government of India, as a wing to cater the small business financing loan opportunities in India,  has launched 10,000 Crore Startup Fund in Union budget 2014-15 to improve  the startup ecosystem in India.

4. Bank Loans:

The first choice, when it comes to availing a small business loan in India is getting the fund from a bank.

For an in-depth study, small business loan in India through banks comprises providing the working capital loan, and the other is funding.

Working Capital loan is the loan required to run one complete cycle of revenue-generating operations, and the limit is usually decided by hypothecating stocks and debtors.

For availing a small business loan in India from a bank, the procedure is somewhat detailed and tedious— sharing the business plan and the valuation details, along with the project report, based on which the loan is sanctioned.

5. Unsecured business loans:

 There is this one easiest funding options you can look for —run your business with unsecured business loans.

Many digital lending companies offer unsecured business loans – which are loans given to  SMEs without any security of collateral.

These collateral-free loans for SMEs are offered with flexible repayment options, disbursed within a short period of time, to cover short-term needs. The sweet spot is you can apply from anywhere.

Digital lenders offer such loan, provided you meet certain criteria and are able to provide some documents for verification purpose to receive an unsecured business loan.

While the plethora of small business loan options may make it easier than ever to get started, responsible business owners should ask themselves how much margin do they need for the business loan for funding their small business.

It’s better to start from the beginning with good corporate governance for a small business loan,as it might get hard to go back later and try to exert fiscal discipline.

E-Learning – The way ahead

With the advent of technology E-learning has quickly become an integral part of the training industry. Business, education institutions and professionals are now migrating towards e-learning from the traditional classroom training. Apart from the obvious benefits of being flexible and not having to spend excess time and expenses on travel E-Learning also has many other benefits over the traditional training methods. Below mentioned are some of the advantages of E-learning:

Less expensive to produce, with  soft wares and applications like Trainers often you can create your own training courses without incurring much cost

It’s self –paced, most e-learning programs can be studied as and when the learner is free. The training courses can be created in small modules so the learner can focus, learn and move ahead as per his convenience

It moves faster, with e-learning the learner himself  is in charge of the training ,this helps him move the training at a faster pace as he can skip parts of the course which he already knows and focus on the parts he actually needs training

It’s consistent, e-learning eliminates the problem of different trainers speaking different content on same subject. This is especially important and quite crucial in company based training

Easily accessible, with smartphones and tablets accessing online training programs has become very convenient. Learners can easily log in their online training courses from anywhere and at any time

Easily updated, online training programs can be easily updated as they only require the updated content to be uploaded on to the servers. This additionally saves cost on reprinting manuals and retaining instructors

Increased Retention, e-learning courses can lead to increased retention and better grasp of the subject as e-learning uses multiple formats like images, video, audio, quizzes, interactions and so on to reinforce the message of the training With constant progress in technology, E-learning platforms are quickly moving up in the world as well. Micro learning, Gamification are a just a couple of new platforms that are coming up for E-learning, more on that next time.

Unsecured business loan: The right answer for a small business

What are unsecured business loans?

Business capital is the foremost pre-requisite, be it to start a new business or to help your start up grow. For small businesses to function smoothly, it is essential to keep the money flowing with quick and efficient small business loans. Opting for traditional bank business loans is often not very helpful, as banks demand collateral or security from the borrower and follow a time-consuming regime to process the loan. Such loans are called secured business loans.

However, more often than not, the borrower may not have any assets to pledge as collateral. It is in such situations that small businesses reach out for collateral-free loans or unsecured business loans. Unsecured small business loans are funds that can be procured by an entrepreneur without having to worry about pledging any assets.

One of the best and easy to understand example of an unsecured business loan is the credit card. Here, the credit card company assesses the borrower’s credit history and offers a personal loan at the higher-than-normal interest rate. There is a pre-approved borrowing limit and a tenure within which the borrower is required to pay off the loan.

Why choose unsecured over secured business loans

One of the biggest advantages of an unsecured SME business loan is that it can be obtained almost instantly with minimum paperwork. It only requires a valid proof of the business, its cash flow analysis and past credit history of the entrepreneur. Defaults (if any), do not put the assets of the businessman at risk. Further, unlike secured business loans, the owner of the business can file for bank ruptcy in the court and obtain a complete waiver of the loan.

Secured business loans require extensive paperwork and proofs, assets (movable or immovable) to be pledged, a good credit history and, a guarantor who can stand as a surety. The borrower is at a higher risk but can procure the loan at interest rates much lower than unsecured business loans. The lender takes the least risk and has the surety of recovering any dues by disposing of the assets pledged by the borrower. Defaults in case of secured business loans are not eligible for waivers in the court of law and result in loss of the pledged assets.

To sum up, secured business loans are for those who have assets to pledge, while unsecured quick business loans are for those who want instant funding and have no collateral to produce.

Businesses that can benefit from collateral-free loans

Small businesses usually start with small investments. After breaking even, these businesses grow and would need more working capital to sustain their growth. There are different types of small businesses that can benefit from collateral-free business loans.

A small business that has been around for more than a couple of years and has been doing well, can benefit immensely from term finance with low processing fee and little or no pre-closure fee.

The top beneficiaries of loans for business without security are suppliers to blue-chip companies. They can procure quick unsecured business funding to pay for pending orders that they are to fulfill shortly.

Distributors comprise a small business that purchases goods from suppliers. They too, can benefit from instant business loans. As they already have dedicated customers to cater to, they can avail the loan and settle the same at calculated intervals.

Retail merchants – both online and stores – can procure unsecured business funding to fund their cash flows, as most of the payments are received through card payments that are settled at the end of the month. 

Get the documentation right

While banks and non-banking financial institutions require extensive documentation for processing small business loans online, there are private business loan providers that provide business loans without collateral to small businesses in India. The minimum documents required to process these loans are:

  • KYC documents of the owner and promoters
  • Business registration documents
  • Current Account Bank Statements of the previous and current financial year
  • Income Tax Returns from the last financial year
  • Cash flow records of the last and current financial year

SEO done right

Search engines do not understand a web page the way humans do. Search Engine Optimization – SEO helps smooth interactions between search engines and a web page, enabling the search engine to better see and understand a web page.The following points will help us understand how SEO is done:

» Search Engines prefer HTML text format rather than images, flash files and other non-text content. These formats are generally ignored by search engines as they put more value in HTML Text format while crawling and indexing web pages. It is thus advisable to build web pages with maximum content written in HTML, also images, flash files should be accompanied with HTML text descriptions to guarantee proper indexing of the web page.

» Link Structure is very important  for search engines. Ensuring all the pages on a website are interlinked will ensure that the search engines crawl through all the pages and all the relevant content is indexed and listed. For Ex:

Here, Homepage A is linked to B which is linked to C but, page D is not linked to any of the pages. In this case, crawler would not crawl page D which in turn would not be indexed despite its great content and good keywords.

» Search engines store data on the basis of keywords in other words, there are millions of data indexed, when we enter words to perform a query, search engines go through their database and retrieve the information based on the words in the query. The way keywords are used on the page is measured by search engines to find the relevance of that information to a query. More specific the keyword leads to less competition and higher chances of achieving a higher ranking. To optimize a page’s ranking use the keywords you want to rank for prominently in title, text and metadata.
Over a period of time, this practice of keyword based indexing was taken advantage of to manipulate engines. This misguided effort is termed as ‘keyword stuffing’ wherein in keywords are stuffed into texts, meta tags, links and URLs which does more harm than good to the website.

» Description of a page’s content is shown at the top of Internet Browsing Software which is called ‘Title Tag’. It is critical to user experience as well as SEO. Keywords used in the title tags will be bold when a search query would be performed using those keywords. Title tags can be optimized in following ways:

a. Place keywords in the starting of title tags for better ranking and better visibility to the users.

b. The first 65-75 characters of the title tag are shown in the search result  by the search engines so,be wise while writing a title tag. If multiple keywords are targeted and it is important to include them in the title tag then go longer.

c. It should be descriptive and readable to grab more user attention and visitors to the site
» Metatags:
a. Meta robots: They control crawler activity on per page level.
– Index/noindex tells search engine whether to index a page or not. Noindex excludes the page from indexing. By default crawler indexes all pages.
– Follow/nofollow tells whether to crawl link on the page. Nofollow stops crawler from crawling and ranking the link. By default crawler follow every link on the page.
– Noarchive tells the engine not to save cached copy of the page. By default crawler saves cached copy of the page.
b.   Meta Description: It gives a brief description about page and not used by crawlers for ranking. These descriptions are basically for advertising and drawing attention of readers.

» The addresses for documents on the web page are of great importance from search perspective and are called URLs. They are displayed in search result and also used in ranking documents. Construct a URL which gives an idea of the content on the page and is short, easy to copy & paste and visible in the search result. Include specific keyword in the URL which is targeted by web page. However, don’t stuff in multiple keywords for SEO, it will result in less usable URL.

» Many a times it happens that there are two or more duplicate versions of a web page with different URLs. Search engines rarely show multiple, duplicate versions of same content. Instead they choose a version which is most likely to be original. This may lead to lower ranking of pages than it should. To combine multiple pages into one Canonicalization is done. This practise tells the search engine that all duplicate versions has one and only one URL. This way duplicate pages stop competing against each other and create stronger relevancy signal overall.

From the above points we can see that keywords play a very important role in SEO so, choosing the right keyword for website is of utmost importance. Below are some of the sources about keyword referral and keyword demand:

a)   Google Trends

b)   Google Adwords Keyword Planner Tool

c)   Wordtracker’s Free Basic Keyword Demand

Search engines have no formula to understand how important the content is for people. They track what people do: what they discover, react, comment and link to on your website, and measure the importance and relevance on that basis. So, along with SEO, market your content to make sure it gets seen to the audience.

Applying for a business loan online in India

Businesses need funds at every stage, whether it is for implementing new business plans, purchasing new equipment or moving to a new office. The need for funds also varies, based on the size and requirements of the business.

This is where business capital loans can make a huge difference. Fortunately, the process of getting a business loan in India has become much easier, as there are many banks and financial institutions fulfilling this by offering options to apply for a business loan online.

Gone are the days when you have to go to follow a long procedure spanning several days to apply for a loan.Now, you can get a business loan in India, at the click of a button.

However, before you apply for a loan, it is important to know a few things about business loans in India.

Types of business loans

Broadly, there are two types of business loans that funding institutions offer to help with your business plans. They are secured and unsecured working capital finance.

To get a secured business capital loan, a business needs to provide collateral security. This can be in the form of assets or property such as computers, company vehicles, shares and real estate (these have to be owned by the business).

In the case of collateral free business loans, the company gets the funds without pledging any property or other assets.

Depending on your specific requirement, you can apply for a secured or a collateral-free loan.

Factors to consider before getting finance for business

There are several individual and business-specific factors and objectives that you need to consider before applying for a custom business loan.

  • Goals: Your Company’s vision and mission are as important for the lending institution as they are for you. They need to be assured that the business loan will support business growth objectives that will make a difference to your company’s bottom-line.
  • Loan amount: As a borrower, you need to have a clear idea of how much funds you want to borrow. For this, having a business plan iscritical to figure out how much money is needed to drive the business objectives for which you’re seeking the loan.
  • Business plans: Putting plans down on paper makes it easy to convince a financial institution on reasons why business capital loans are needed. A business plan is like a road map and an essential component of the loan process.
  • Loan Repayment Schedule: When taking a new business loan, you need to consider the monthly EMI that you need to pay for the loan, as you cannot afford any surprises.You need to check your EMI calculations, considering the interest ratesandperiod of taking a loan, toget exact amount of EMIs payable.
  • Documentation: Depending on the type of loan required – secured or unsecured – the documentation you need to submit will varyFor an unsecured loan, the minimum documentation required is your KYC documents (Aadhar and PAN Card), the bank statement of the business, and business documents. These will vary for each lender.

A small business can apply for a loan with a bank or a new-age lender. New age lendersoffer a range of custom easy business loans, personalized to your business needs. This ensures that you can get the specific funds tailored to your specific needs, just when you need them. 

Once you have applied for a loan by filling up an online loan application, with all necessary supporting documents, the loan processing takes about 3 to 10 working days from the date of submission, depending upon the lender. Once the processing is complete, you will receive the loan amount into your bank account.

Getting a small business loan without security in Mumbai

It is an exciting time to be an entrepreneur. Why? Indian banks, new-age financial institutions and NBFCs are making it easier to get quick business loans. Typically, there are two types of business loans in India available for a small business owner– secured and unsecured business loans. There will be occasions when a business owner wants a loan without security. Unsecured business loans or loans without security do not require any collateral – as they tend to be smaller. If you want to apply for a business loan in Mumbai, here are some things you should know.

Factors that influence an unsecured business loan application:

 Since finances are the backbone of any venture, financial institutions make it easy to get collateral free loans. Applicants usually are required to meet the following criteria, to get a business loan in Mumbai:

  • The applicant must be between 23 -65 years old
  • The business should have been operational for a minimum of 1 year and tax returns should have been filed.
  • The applicant must have a good credit score.
  • The applicant must have a good business growth plan withrevenue generation.
  • The applicant must have chalked out a clear repayment plan

If the business meets the above conditions, the applicant needs to fill in an online business loan application form on the lending company’s website or mobile application. A loan officer will consider the above factors before disbursing the required funds. Collateral free loans carry higher interest rates as the lender’s risk is higher. The term for an unsecured loan is also shorter.

Other factors, which influence the business loan process:

Stage: If you are a new business, it may be more difficult to get a loan from a bank and in such cases, private business loans are an option to consider.

If your business has been operating for 1 or more years, it is easier to get that loan as there is a performance track record that can be considered, before a loan is offered.

Product/service competitiveness: Lenders consider this aspect before they sign off on a business loan in Mumbai or any other location in India. If your company has been doing well in its niche or is on par with companies in a similar field, then unsecured loans are easier to come by.

Amount of business loan: The amount requested plays a big role in the sanctioning, especially in the case of collateral free loans. Modest amounts are easier to get if your company’s financials are strong. Before applying, you should run all the possible numbers and be very sure of your ability to repay.

Whom to approach: It is always easier to approach an institution you have done business with in the past. Talk to your digital lending company or NBFC about getting a collateral free loan, as he/she is familiar with your business and its operations. Having a good credit score and a solid repayment history will facilitate getting business capital loans, when you need them most.

Essential tips to note:

  • Find out more about the terms and conditions for unsecured business loans being offered by different institutions.
  • Eligibility criteria can vary for each institution, as well as the formalities required for easy small business loans.
  • Keep in mind that you will have to pay higher interest rates for unsecured business loans as compared to secured business loans.
  • Your credit scores (CIBIL) must be good to get a collateral free business loan.
  • There will be a service charge levied to get a loan.
  • Loan limits vary for each institution – so do your homework and apply only for the amount that you need.
  • Loan processing usually takes 4 to 5 working days after the required documents have been submitted and reviewed by the lender.
  • Loan pre-payment is a good idea – check out this option and the charges you will incur for early repayment of the loan.

Unsecured business loans are a great resource for the growth of a small business. While secured loans are essential to establish and keep a business running, short-term unsecured loans play an important role.  These loans are critical as they help a business to tide over difficult times.

Small Business Loans in India

In a world where inequality is the normal, attaining success is as difficult as it gets, especially for small businessmen working independently at the grassroots. Tribe3 was formed, with an aim to uplift the 3 billion who are economically under-served but have great potential, by identifying capable entrepreneurs and providing them with capital.

Tribe3 offers hassle-free and swift business loans in India for small businesses, through a simple online loan application process. Backed by the Avishkaar – Intellecap Group, Tribe3 was born to strengthen the nation from its core. Today, it simplifies the life of MSMEs through digital enablement and inclusiveness. Our business loans for new businesses enable India to become financially independent, and to fuel the Make in India movement.

Tribe3 is an innovative digital lending platform that aims to grow together with small business owners. We leverage our digital platform to analyze data to quicken the lending process; so as to offer small business loan options to businesses that need it, when they need it. With that, we aim to offer swifter lending at a large scale, addressing the under-served demand of small business financing loan.

Tribe3 embraces digital technology to bring path-breaking innovative ideas that can empower MSMEs across India, with which you can apply for a new business loan online in an instant. It helps finance small businesses with small business loans offers ranging from INR 1 Lakh to INR 20 Lakhs – with the ease of online application and loans without security.

Tribe3’s Micro Business Loan between INR 1 Lakh and INR 3 Lakhs is best suited for very small businesses, such as a local grocer, stationery or an electrical store. The online business loan can help you with funds for stocking additional inventory during the festive season, running a marketing campaign, or renovating the premises.

With a choice of tenure between 12 to 36 months, we have small business loans with offers that are made to suit your differing business needs. If you have a business like a small cafe, restaurant, medical store, salon, or so on, an MSME loan for new business between INR 3 Lakhs and INR 5 Lakhs or a Small Business Loan in India can help you hire new employees, scale up operations, or sell your products online.

If you have a mid-size business, like apparel, manufacturing unit, or export business, etc, our SME loan without collateral or Medium Business Loan ranging between INR 5 lakhs to INR 20 lakhs can help you purchase new equipment or machinery, more inventory, and even scale up operations.

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In a world where inequality is the norm, attaining success is as difficult as it gets, especially for small businessmen working independently at the grassroots. Tribe3 was formed, with an aim to uplift the 3 billion who are economically under-served but have great potential, by identifying capable entrepreneurs and providing them with capital.

visit us – https://www.tribe3.com/

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