The important points in getting a bank loan are called as three C’s; which means character, credit and collateral. The banks usually look for these factors before clearing your loans. Character represents more than not having a criminal record. It specifies that the bank feels confident that you are not going to suddenly disappear for parts unknown if there is any kind of trouble or you business runs into trouble. The banks also consider ties to the community such as long residence, family ties, and home ownership. The other important point while you apply for a bank loan is that you have a clean credit history. A couple of late credit card payments does not matter, however missing mortgage payments for consecutive period in a row requires a good explanation. Banks appreciate good character and good credit, but they live for solid collateral. Solid value and likely to be worth a lot even if the business goes bust. Raw material, inventory and goods are second choices for collateral;-they will lose their value more quickly than fixed assets but still be worth something.
Can you get a bank loan for a business?
The standard for getting a bank loan for business varies much more widely than for consumer loans. Also, there is a different criteria followed by different banks. However here are few basic rules which will give you an idea of what your chances are of getting a bank loan.• To get a bank loan to set up a new business is comparatively tough.
Getting a bank loan for a business is comparatively hard than the consumer loans. Because the standards followed by banks are more lenient for lending to consumers than to businesses. So what you can do is borrow the money from the bank as a consumer and then turn around and personally invest the funds in your business. All you need to do is to never lie how about you are going to use the proceeds on a loan application. You can use this amou8nt of money which you have secured as a personal loan to expand your business. You need to be extra careful that you invest the money wisely. Otherwise you can run into big troubles in case you don’t utilize the funds properly.
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