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How to determine business loan affordability

For years, business have happily applied for working capital loans, invoice (bill) discounting, collateral free loans and small business loans in order to improve and expand upon their business. Whether it is required for emergency cash relief in a period where working capital has been tied up, or the money has been required to facilitate growth of the business by expansion, purchase of fixtures and fittings or even hiring new staff, the requirement of having cash from borrowed funds is there for almost everyone. Yet, it is amazing how most business owners completely forget the flip side of the coin, about whether they can actually afford to repay the loan or not. It definitely is something to consider, after all, life is tough enough as it is with paying your vendors, employees, overheads and maintaining your machines, without having to also add to this with a loan repayment plan which

I’m sorry, Mr Banker…

Dear Mr Banker, I’m so sorry for all the troubles I’ve caused you. I know you are a busy man, and have far more important clients than little old me to visit. But I thought I would write to you anyway and tell you that I’m doing alright. My business is growing and I couldn’t be more excited! With my success comes a problem, a problem that hurts me in a manner that seems unjust and cruel, but yet accepted by the good people who walk this earth. Every time I venture to sell a product that I’ve poured sweat and tears into making, I always hear that dreaded sentence from the buyer – ‘I’ll pay you in 30-60 days’. If I had a nickel for every time somebody said that to me, I would be, well, rich! And now I’m growing so fast, I often don’t have enough money

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Business Loans Guide – Pay attention to your CIBIL score

At MarketFinance, it is so sad to see amazing small business owners with growing businesses apply for loans, and get rejected because their CIBIL scores are poor. We had a think about this at HQ, and decided to come up with a blog post to help people out. Because you need to pay attention to your CIBIL score. Your CIBIL score (or the CIBIL Transunion Score) is a 3 digit numerical score given to you as a consequence of your credit history as depicted on the Credit Information Report (CIR). It ranges between 350 and 900, with 350 being a consequence of a poor credit history and 900 meaning you have an exemplary credit history. Why is it important to pay attention to your CIBIL score – Well, because not only does it allow you to apply for personal loans in the future, it also determines how your application will go for

Business Loan Guide – Why your loan offer is small and unanticipated

At MarketFinance India, we have noticed the trend of start ups and MSMEs applying through us to obtain loan offers from our wide range of lending partners. They apply through our swift application process, and often the loan offer is ready for them within days. Unfortunately, what follows is that they turn around and reject the loan offer, often because the amount is not as high as their expectations would have it. We at MarketFinance India recognise the frustrations of dealing with lenders who are not prepared to provide loan offers which you want in order for your business to flourish, but, here’s a little secret… the likelihood is that you aren’t prepared for a larger loan either. How is that possible? You know your business more than anyone else right? Wrong. Time and again, banks and NBFCs see people in the same field as you apply for loans, so

Business Loan Guide – types of loans for small businesses

We have started seeing that borrowers often come in to ask for small business loans but unfortunately are not well placed to understand the nature of what the small business loans are, in order to help them with managing their businesses in the right way. This article helps you as a borrower understand what financial products are available, as well as the advantages and disadvantages, so as to help you make the right decisions, be it with MarketFinance or any other lender for that matter. Cash credit/Overdraft – both are forms of cash withdrawal which a business does not have claim to ie – it is money that a small business can borrow at its own accord. Because of the leeway to borrow, the rates of interest are usually higher than other structured products. The independence to borrow as and when required can be a boon or a burden. It

Business Loans Guide – high interest rates

Getting small business loans continues to be a problem for small business owners, including high interest rates, and during our time at MarketFinance we have found that there are a few key reasons for small business loans to have such high rates. Lenders lend at high interest rates when they perceive the risk of default to be higher, and this is more likely to happen when MSMEs consistently over look the following: 1. Borrowing as a means to help, not as a means out of disaster Too often, those who visit the bank or NBFC for borrowing are those who are in desperate trouble; they haven’t been paid by dodgy debtors and are scrambling around in order to make the payments to irate suppliers. Worse, some of them are on the verge of ‘that big idea’ which will see them generate millions, if only they could get a loan. At

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Business Corner – Managing small business risks

Small businesses are plagued by risk. Despite this, once you have decided to take the great step into the unknown by starting a small business! Great stuff! The world of the unknown awaits, and if you are excited and thrilled by the opportunities ahead, then good for you! Of course, it isn’t anything new that small businesses and start-ups are inherently risky, and that 9 in 10 fail. And of course, there is the added fear factor of not getting a regular pay cheque, which means you have a limited amount of time to make sure that your business can start paying you for the work you put in. Here are some handy tips to help you, compiled by a bunch of people who have experienced small business risks first hand and want to help you learn from their experiences. Pick something you are familiar to and can relate to

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Business Loans Guide – financial management

Managing finances in a business is among the few important things that need to be considered when starting and carrying out a business. It is all about utilising available funds in order to achieve the objectives of the business. Financial management is aimed at planning, observing, organising and managing the monetary resources of a business.   Small business financial management strategies   Small business financial management is mostly concerned with procurement, allocation and control of financial resources so that a regular and adequate supply of funds is maintained to run a business. Once the funds are in hand, they should be utilised in maximum possible ways at low costs and should be invested intelligently in safe ventures. A few tips that can help you efficiently use your funds while running a small business are listed below.   In the initial years of managing a small business, you need to estimate

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The road to your Small Business Loan – Part II

In this series of posts, MarketFinance provides you with a complete road map to figure out your way towards getting a small business loan.   Sourcing a small business loan is a thrilling prospect as investing in your business is the principal gateway to growth in revenues and profitability. However, going through the chores of applying and getting a small business loan can be a stressful and protracted process.   Market Finance’s “the road to your small business loan” series is a guide for entrepreneurs and small business owners that will help you navigate the process of sourcing a loan, reducing the ambiguity that runs through it. This is the second part of the Blog post. Part II Credit History: the lifeline of Small Business Growth   For better or for worse, your personal credit history will play a key role when you apply for your small business loan. If

The road to your Small Business Loan- Part I

In this series of posts, MarketFinance provides you with a complete road map to figure out your way towards getting a small business loan. Sourcing financing for your small business is a thrilling prospect as investing in your business is the principal gateway to growth in revenues and profitability. However, going through the chores of applying and getting financing can be a stressful and protracted process. Market Finance’s “the road to your small business loan” series is a guide for you startups and small business owners that will help you navigate the process of sourcing a loan, reducing the ambiguity that runs through it. Narrow down the needs of your business As we seek to raise a loan to grow our business, the starting point is deciding on how much money to raise which should be balanced against the capacity of the business to service such debt and make principal repayments.

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