October 11, 2018
Capital is the core of each and every business and there are times when you want more
capital to expand your business. Keeping this in mind, a number of finance companies
now offer SME loans for business owners who are facing financial crunches. This ensures
you get the capital you need to be successful and run a thriving business. However,
were you aware that two similar businesses can receive two very different loan offerings?
Both businesses might need the loan to cover the same financial gaps and both businesses
might even approach the same lender but still end-up with varying capital deals.
Wondering why? Well, certain factors related to your business affect the type
of loan you receive. This article will highlight these factors to ensure you
have a better idea of what to expect when applying for a business loan.
1. Credit scores.
Credit scores have a major bearing on the SME loan you are provided. Lower credit
scores can be attributed to higher rates and lower eligibility. It’s also worth
noting that, if your business is relatively new or you are borrowing from a certain
lender for the first time or you are the sole proprietor in the business, some
lenders might look into your personal credit record to ascertain your loan worthiness.
So before you apply for a business loan, remember to check and work on your credit
2. Stage of business.
The stage of your business is another very important factor influencing your SME
loan. Companies that are just starting up will inspire less confidence in the
eyes of a lender as compared to a company that has already established itself.
Thus newer company owners should expect lower loan amounts and slightly higher
3. Monthly revenue & small business loans.
Your monthly revenue determines if you will be able to successfully and quickly repay
the loan. Companies with higher monthly revenue are more likely to repay the
loan than those with a lower monthly income. Therefore, when applying for the
loan, it makes sense to show just how successful your current business is and
how much more profitable it will be after you get the capital you need.
These were 3 of the most important factors affecting SME loans. In some cases, the
current market scenario will also influence the loan offering provided. For a
better idea, feel free to approach one of our branches or speak to one of our
We hope this article has been useful.