To materialise their plans for growth, most business owners look for a suitable commercial finance.

1. Scott Droney - Six Steps to a Loan For Business Expansion
To materialise their plans for growth, most business owners look for a suitable commercial
finance. Thanks to the convenience provided by digital technology, applying for a loan is not
a cumbersome affair anymore. A quick search on the Internet brings up the business loan
interest rates charged by various banks and non-banking finance companies .
The digitally active NBFCs, referred to as FinTech companies, have also become popular
suppliers of commercial loan. Numerous SMEs, including startups that are as young as an
year old in their domain, have availed business loans from FinTech lenders. Traditional
entrepreneurs too are delving into their commercial lending policies to understand the
unique advantages they can derive from this source of finance.
If you believe that your business is progressing in the right direction and have a framework
for its growth, this may be a good time to weigh your options and apply for a business loan.
Opt for the online process only on a genuine lender's website
You would not want to enter any of your personal details and certainly not your financial
details on an unsecure website. As the process to apply for business loans gets simpler,
many organisations may be sending you unsolicited emails with attractive offers. The
interest rates on some may be unbelievably low and others may be promising you loans on
very easy terms. Do not be misled into something that may cause you to regret later.
Make sure that the organisation you choose for your commercial loan is registered, gets
reviews from verified customers and has a trustworthy, encrypted website with https
domain. Check its credentials from more than one source and talk to the customer service
team if required.
Gather the right information about all possible charges
When you get commercial finance from an institutional lender, you will naturally pay
interest on the sum borrowed. Usually, the advertisements for loans show the interest rate
in prominent fonts but do not talk much about the processing fee and other associated
charges. However, you do end up paying multiple costs of loan through your EMIs.
To get an idea of what you will be expected to pay each month, use a business loan EMI
calculator if it is provided on your chosen lender's website. If this tool does not have the
columns for the processing fee and loan insurance charges, ask the lender directly about
them and then add the figures to the total amount that you will be expected to pay along
with the interest and principal. This will give you a better idea of your actual EMIs.

2. Check if the loan is secured or unsecured
If you are familiar with the loan policies of conventional lenders, you know that you will be
asked to hypothecate an asset such as owned business premises or any other immovable
property as security.
Loans from most banks are backed by collateral and even though the borrower can continue
to use the pledged asset, he or she does not have the rights to sell it till the borrowed
amount is paid back and the hypothecation ends. If you do not want to pledge any property
to your lender, you can simply opt for the unsecured loans provided by the FinTech
companies.
Go for a short-term loan wherever possible
To minimise the interest outgo on your loan repayments, it is advisable to take the funds for
the shortest possible tenure. Some organisations have policies that prevent them from
lending small amounts for short tenures. You may be asked to stretch your loan term to at
least three years.
Check your business eligibility criteria and scan the necessary documents
Having understood the loan options available for you from an organised lender and the
amount you are required to pay back including all the charges, you need to check the list of
documents necessary to be sent with the application.
These documents may vary slightly according to the kind of commercial loan being applied
for, but their purpose is to establish the credibility of a business.

3. Lenders usually ask for paperwork verifying the age of business, its current holding of
assets-liabilities and bank statements.
On choosing the online mode, you only need to send the scanned copies of the documents.
At times, banks ask borrowers to come in person with some of the documents. The FinTech
organisations, on the other hand, only need the soft copies to assess the business's
standing. After the submission of application, this decision is a matter of minutes.
Alter your EMIs and pay back early when you can afford
In addition to applying for a short-term loan another strategy to decrease the interest
payments is by altering the EMIs whenever feasible. Once you have received your business
loan, you should have the freedom to repay it through any instalment.
Fortunately, there is such a provision when the loan comes from a FinTech lender. You can
ask for an increase or decrease in your EMIs as per your business earning. It is, however,
prudent to make the most of any sudden increase in your revenue and repay a higher
instalment amount monthly or pay off the outstanding amount in lump sum.