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7 Habits of Highly Effective Business Loan Borrowers

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Borrowing money is one of the most common sources of financing for SMEs and getting a loan approved is not an easy task for every business loan borrower but the highly effective business loan borrowers know the most efficient way to borrow money from banks and NBFCs.
What is a highly effective business loan borrower?
“An effective business loan borrower is someone – who knows the fastest, easiest and cheapest way to get a business loan, who uses their loans for business purposes only and then pays them back on time.” – Lalit Bhojwani 

 

Today banks and NBFCs are more choosy in providing business loans since they don’t want bad debts to deteriorate their asset quality. But when it comes to “Highly Effective Business Loan Borrowers”, banks and NBFCs love them providing business loans at anytime. The question now arises: 
What makes an highly effective business loan borrower?
Their good and healthy financial habits! The following are the habits that effective business loan borrowers have in common – 
  1. Applying for a loan when it is necessary: Highly effective business loan borrowers carefully decide whether or not they really need a loan for their business. Applying just for checking your credit worth in the market in not a good idea as frequently applying for a loan and not availing the loan may hurt your credit score badly.
  2. Exploring before applying for a loan: They explore all options using digital ways like NamsteCredit.com before applying for a loan. They rarely talk with their current banker before exploring all options of getting better loan deals.
  3. Preparing before meeting the lender: Highly effective business loan borrowers know  the importance of PD (Personal Discussion) meeting with the lender. Before sanctioning your business loan every lender seek to meet you and i.e. called PD (Personal Meeting). Apart from your loan documents this meeting decides your loan sanction amount so highly effective business loan borrowers never miss this meeting and they prepare better for this meeting by collecting all info and docs of their borrowings and bank accounts. 
  4. Borrowing enough but not too much:  Highly effective business loan borrowers know borrowing too much isn’t always a good financial decision for their business. They always maintain their TDSR  (Total debt service ratio) low.
  5. Reading the loan account statement every month: Highly effective business loan borrowers not only read their loan account statement every month but also they know how to read it correctly and carefully. They never throw out their loan account statement or delete it from their inbox before taking a closer look as it helps them to feel better about their finances.
  6. Hating the cheque bounces: Highly effective borrowers hate seeing their inward or outward cheque bounces in their all bank and loan account statements. They know how cheque bouncing can affect their credit or CIBIL score badly.
  7. Paying their loan on time:  Almost all borrowers know that not paying their loan on time can damage their credit ratings but highly effective borrowers not only know this but also they apply this knowledge by paying their loan on or before time. They ensure that they never miss an EMI and for managing their EMIs they use smart EMI automation systems like ASAP (Auto Pay Auto Save).

There is no secret recipe for being an highly effective business loan borrower and you can too become a highly effective business loan borrower by following above habits. The above good habits will repay you with better credit scores, cheaper loan offers, and higher business loan amounts.

Have you been effective in getting a business loan?

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