How to Supercharge Business Loan Eligibility

For small and medium-scale businesses, the need for capital to fuel growth is vital. Balancing investments from personal funds, past profits, and business revenue requires a lot of work. In such situations, approval for a business loan can feel like a lifeline, but the process is long drawn if one does not check their creditworthiness before applying.

Using CIBIL Rank and Company Credit Report (CCR) to improve the chances of obtaining a business loan can be very helpful. While many are familiar with CIBIL Score & Report, the concept of CIBIL Rank and CCR might be new. Like CIBIL Score showcases the creditworthiness of individuals, CIBIL Rank showcases the creditworthiness of MSMEs and businesses. The following tips illustrate how using this report can increase a business’s chances of getting better business loans.

The term 'Company Credit Report' may sound technical, but breaking it down reveals its simplicity. The CCR is a detailed summary of a company’s credit history, submitted by financial institutions to TransUnion CIBIL^*. It includes the business’s CIBIL Rank^#, credit history, active and inactive credit accounts, firmography, repayment history, and other financial details. Lenders use this report to assess a company's creditworthiness.

Knowing the details of a business's financial profile—is just as essential for business owners as it is for lenders. A strong Company Credit Report can facilitate lenders in determining a business's creditworthiness as a responsible credit user.

Additionally, a high CIBIL Rank improves the possibility of a company to qualify for their desired loan, which may be essential for expanding operations or investing in development. A good rank also improves the chances of lower interest rates, which gives them an option to reinvest savings in the business for further growth.

Improving the CIBIL Rank begins with obtaining the CCR from TransUnion CIBIL and reviewing it regularly. This practice helps identify your business’s present credit profile status and areas needing improvement. Repayment history is critical; hence, timely payments should be prioritised using reminders and Electronic Standing Instructions (ESIs) to avoid missing due dates.

Reducing outstanding debts is another important focus area. Monitoring the credit utilisation is crucial, keeping credit usage below limits by making pre-payments and avoiding over-dependence on credit.

Armed with an improved CIBIL Rank, approaching lenders becomes more straightforward and confident. Comparing terms and negotiating better deals becomes possible with a stronger credit profile. Building a good relationship with the lender proves beneficial, as regular communication and timely payments make future applications smoother.

Maintaining a strong CIBIL Rank requires consistent effort and financial discipline. And starting today can pave the way for a brighter, more prosperous future for any business. Learn more at https://www.cibil.com/company-credit-report

* Access your CCR here # Available for companies with current credit exposure of up to INR 50 crores.