If you're having a Business in Mumbai from last three years & profit from last two years — you have apply for Business Loan on the basis of following options.
Before you start applying for a Business Loan, you need to answer several critical questions that help you determine which kind of Business loan is best for you:
- How much Business Loan do you need?
- How long period you will it take to pay Business Loan?
- How long years have you been in the business?
- What is the current financial strength of your business?
- How much collateral, do you have to put up for the Bank Facility?
- How quickly do you need the Business Loan?
If you want a Business Loan, you will need to start thinking on the loan process from the lender's point of view, as said by many bankers. So, before you take out your calculator, familiarize yourself with a few key questions. These are the questions lenders have in mind when determining whether you'll get a loan.
1) DSCR: - Banks and Financial Lenders use several things to determine if a business entity is a good candidate for a Business Loan, one of which is a debt service coverage ratio (DSCR). one side of this ratio is the cash that you, the business owner, have available to pay back a loan in a given year. On the other side is the amount of money you're borrowing per year, plus interest. Business owners with a DSCR of 1.25:1 — also known as 1.25 times coverage — are considered to be a good credit risk, and are usually able to afford, and therefore secure, financing. Banks and Financial Lenders estimated the optimal cash flow needed for a loan-worthy business a bit lower, at 1.15 times coverage.
2) DTI:- Banks & Financial Lenders use another tool, called a debt-to-income ratio (DTI) to determine your suitability for a loan. DTI is easy after you've already calculated your DSCR. First, tally up your monthly debts, including car loans, credit card payments and other debts you might have. Also include your housing expenses, like mortgage payments, property taxes and homeowners insurance.
Divide your total monthly debts by your monthly gross income and then multiply that number (which should be a decimal) by 100 to get a percentage. Most traditional lending institutions look for DTIs no higher than 50 percent.
For more information feel free to contact us on 9321457879 or you can submit your information on www.bhcapital.in and our team person will contact you.