What are the steps MSMEs should adopt to be loan-ready

MSMEs could need funds at any time and they have to be loan-ready. Receiving the right amount of investment at the right time is crucial for the success of any business. MSMEs are no exception.

If you are an MSME business owner and want to avail loans when you need them, adopting these 3 points will make you loan-ready:

1. Pay your lenders on time, every time: Ensure that all your existing loans are serviced without any defaults or late payments. This greatly boosts your credibility and credit score, and lenders would be willing to lend you money any time without thinking twice. You should take all necessary steps to pay the monthly EMIs on time. A healthy repayment history ensures future loans at cheaper interest rates.

2. Where you apply for credit, matters: Due to the unavailability of finance, some MSME owners might go to informal lenders and end up in a debt trap. This should be avoided at all costs. Opt for formal lending avenues and go through official channels for your MSME loans. This way, you can create a good record for your credit history. This will in turn help you in getting better loans in the future.

3. Check your Credit Score and Credit Report regularly: This simple step can save you a lot of time and energy during your next business loan application. You can check the credit health of your business at CreditMantri. Ensure that your report is accurate. If you find any discrepancies, try and get them resolved soon. Errors in your credit report may decrease your credit score hampering your loan eligibility. If you find that your credit score is low, you can take a few simple steps to improve them. Check out this helpful article on “How To Build Good Business Credit”

Conclusion

Achieving and maintaining a healthy credit history is very important for MSMEs to be Loan-Ready. Though it takes time, opt for formal lending channels to avoid any unpleasant experience. Most importantly, be up-to-date with your credit score and credit report so that you can take the necessary steps to keep it high and healthy.