When you go for a business loan, the one thing that matters the most is your credit history or business credit score. Credit history is basically a statement of your loans and repayments in the past. Credit rating is assigned by rating agencies such as CIBIL and CRISIL.
Here are the benefits of having a good credit history.
A good credit score indicates that you have been paying your dues regularly and in a timely manner. This bolsters your business’s standing in the eye of the bank or the NBFC.
When the lenders see that your business is in the green of the credit scale, they will offer better loan terms. You will be able to secure a higher loan amount, a lower rate of interest and flexible repayment options with auto renewal terms.
The benefits of credit score are not limited to getting working capital loans or commercial loans only. We all know that a premium location can work wonders for your business operations. Landlords of premium properties also ask for credit reports these days to ensure your business’s ability to pay the (higher) rent.
Apart from business loans, investments are another source of financial help for budding entrepreneurs. A good credit score indicates healthy business practices and a good ROI. Thus, having a good credit history will build investor confidence in your business.
Therefore, it is quite important for a modern business to retain a healthy credit score. There are several things that can help you achieve that such as financial prudence, asset and liability management techniques and business loans.
Getting a loan and repaying it in a timely manner will build up your credit history. However, you must be very careful with the terms and conditions for your first business loan.
It might be that the interest rates for your first business loan are on a higher side but flexible repayment terms can offset that disadvantage. For example, Lendingkart Finance offers unsecured business loans up to 1 crore with options to repay in fortnightly or monthly instalments. If you want to pre-close your business loan after the first EMI, there are no pre-closure charges as well.
Such loan terms make it easier to repay your working capital loans and get a higher credit score for your business. To know more, visit us at www.lendingkart.com or download the Lendingkart smartphone app.
You might also like these
Khadi and Village Industries Commission (KVIC)
Overview: KVIC is a statutory body formed by the Government of India under the KVIC Act of 1956 that aims to nurse employment and economic uplift in rural India. The term Khadi goes back to the Swadeshi Movement launched by Mahatma Gandhi in 1920 by propagating the use of hand-woven and home-spun fabrics. It was …
How to Check and Improve CIBIL Credit Score for Business Loan?
How to Check and Improve CIBIL Score/Credit Score for Business Loan? Banks and other financial institutions rely heavily on the CIBIL Transunion Score of a person to judge his/her creditworthiness, based on which the credit is disbursed to the borrower. The score typically ranges between 300 to a higher limit of 900. A score that …
CIBIL Score for Business Loan – Check Minimum Credit Score
Minimum CIBIL Score for Business Loan Businesses require huge amounts of money. Risk-taking entrepreneurs stake their lives and careers on the line to start companies. These businesses and the job opportunities they introduce to the economy are part of the economic lifecycle. Loans fuel such businesses and good loans with attractive interest rates enable people …