July 7, 2017
There are various options to consider when you are looking for a business loan. In the age of super-specialization it is not surprising to find financial institutions offering business loans that are industry-specific.
Keep these five things in mind before applying for an industry-specific Loan for Business to avoid rejection:
Write a business plan that is specific to your industry
Typically, when you apply for a loan, the loan officers do not have an in-depth understanding of all industries. They follow generic rules which are applicable across all industry types. However, the loan officers of industry-specific loans have a good understanding of your industry. Hence you have a better chance of your loan getting approved with a business plan that is created specific to your industry. Achievements or credentials also hold value during the industry specific loan application.
Share industry-specific data
While applying for an industry-specific business loan, you must remember that the loan officers are aware of your industry and its trends. More than the business plan if you can share some data from your operations which can help them understand the scope of your future success, then the chances of approval becomes high. Remember that your application will be assessed with respect to the trends and benchmarks of your industry. Hence you must endeavour to provide industry-specific data to help the officers get a better understanding of your business.
Assess your exact loan requirement
A business plan is an important document as it helps you understand the scope of your future business and the investment sought clearly. You must try and make this plan as detailed as possible. If you miss some expenses, then you may fall short of the working capital in the long run. Also, certain industries are season dependent while some others are market dependent. You must seek the advice of a professional to chalk out your business plan and understand the exact amount of loan required.
Opt for a collateral-based secured business loan
A secured or collateral-based loan has many benefits; a lesser rate of interest and higher chances of approval. While applying for industry-specific loans, you can choose to offer an industry-specific collateral. If a dentist provides his equipment as collateral, then the valuation of the collateral is higher in an industry specific loan as it considers the relevance of the collateral to your business too.
Research, compare and decide
Most banks and financial institutions are offering these loans hence you need to compare the interest rates offered, fees and the application process among other things. Some banks / financial institutions might be keen on lending to doctors while some others might have an inclination towards architects. Research well. Ask around. Find a few options, compare and finally choose a loan that matches your requirements.
Bajaj Finserv has unique loan offerings for Doctors, Engineers & Chartered Accountants. The loans have been designed keeping in mind the diverse needs of various professions.