1) Eligibility Criteria For Finance Without SecurityÂ
Funding eligibility depends upon various factors which differ from every institution / investor. The main factor of course, is your ability to repay. Lenders / investors that offer Funds will run extensive checks on your business, profits, financial statements and scope of success. For example banks will assess your repayment capacity with the kind of organization you have built.
For your benefit, we have put down some of the main things to take care of to assess fund raising possibility for your business. Keep the following points in mind to ensure your application goes through.
2) Stable and Sustainable Business
A stable business record goes a long way in improving your eligibility for a Fund Raising. Businesses seeking funds should have been running their current business (the one for which you need funds) for a minimum of 3 years. Apart from this, you should have been involved in managing stable businesses for a minimum of 5 years to increase your chances of securing desired funds / loan.
3) Business Prospectus
Besides a stable business, a business has to present a viable prospectus or business opportunity to cater with the fresh funding. It must be based on the financial statements submitted so far in last three preceding financial years & aligned with past execution capabilities.
4) Financial Statements
Current and previous financial statements of your company are used by the bank to evaluate your repayment capacity. These are very crucial. Any kind of financial instability due to mismanagement is frowned upon and can reduce your chances of being eligible for a business loan. Clean and well maintained Balance Sheets that show financial stability and sensible transactions helps in improving your eligibility for desired funds / business loan.
