Ever wonder why business loan interest rates vary from lender to lender? There are several factors based on which every financial lender such as a bank or an NBFC determines the interest rate for any loan. Here are the factors which are considered by banks and NBFCs for determining the interest rate for your business loan application.

1. Web: Lendingkart.com Phone: 07949067349
BUSINESS LOAN
INTEREST
RATES –
FACTORS AND
FEATURES TO
GETTING AN
OPTIMAL RATE

2. Web: Lendingkart.com Phone: 07949067349
ABOUT LENDINGKART
LENDINGKART Technologies Private Limited is a fin-tech startup in
the working capital space. The Company has developed technology
tools based on big data analysis which facilitates lenders to evaluate
borrower’s credit worthiness and provides other related services.
LENDINGKART Finance
Limited (formerly Aadri Infin
Limited), is a non-deposit
taking NBFC, providing SME
lending in India. The
Company aims to transform
small business lending by
making it convenient for
SMEs to access credit easily.
LENDINGKART Finance
Limited, unlike banks and
other NBFCs,do not focus on
vendor’s old records (Past
Financial Statements & Income Tax returns) to evaluate the credit
risk profile of a potential client. The NBFC focuses on the client's
current year’s cash flows and business growth. The objective is to
make capital funds available at finger tips so that entrepreneurs can
focus on business instead of worrying about gaps in their cash-flows.
We are currently based in Ahmedabad, Bangalore and Mumbai but
we serve across India.

3. Web: Lendingkart.com Phone: 07949067349
How Business Loan Interest Rates Work
Ever wonder why business loan interest rates vary from lender to
lender? There are several factors based on which every financial
lender such as a bank or an NBFC determines the interest rate for
any loan. The same holds true for a business loan as well. The more
you satisfy these factors the lower your interest rate and accordingly,
a higher interest rate is the result of such criteria not being
satisfactorily met.

4. Web: Lendingkart.com Phone: 07949067349
Here are the factors which are considered by banks and NBFCs for
determining the interest rate for your business loan application.
Credit Score
The most talked about of all factors which determine your eligibility
for a business loan and hence your interest rate, is credit score of
your organisation. Some financial institutions also account for the
credit score of the business owners to gauge their temperament for
repaying loans. While having a healthy credit score helps in making
the loan process smoother, you can get a business loan with an
average credit score if you get the other variables right. The norm is
to have a credit score more than 700 to be considered eligible and
more than 750 to be favourable.

5. Web: Lendingkart.com Phone: 07949067349
Age of Your Business
If your business is relatively young/new, lenders will consider your
business loan as a high-risk entity, and charge you a higher rate of
interest. Then again, having a long-running business does not
guarantee a lower interest rates, as is covered in the following point.
Profitability of Your Business
Everyone likes a profitable business. That is especially true when it
comes to lenders. If you are running an efficient organisation with
large profit margins, lending institutions will most likely discount
your business loan interest rates for it.

6. Web: Lendingkart.com Phone: 07949067349
Volatility of Your Industry
Another important factor considered by lenders while calculating
the interest rate for a business loan is the prevailing market
conditions in a certain industry. If the market is excessively volatile,
the interest rates go up, and if there is a projection of short or long-
term stability, the interest rates are likewise relaxed.
Assets and Infrastructure
While unsecured business loans do not require a collateral, having a
sound infrastructure and assets help if you are applying for loans in
the range of six-digit figures.
Small Business Loan Interest Rates – Fixed vs. Variable

7. Web: Lendingkart.com Phone: 07949067349
Based on the above factors, a lender will offer you an interest rate on
the loan amount. The rate can be fixed or may fluctuate based on a
market model that dictates variable interest rates. Although most
people prefer a fixed interest over a variable interest rate, both have
their advantages. If the market prospects are looking good, a
borrower can save on interest payments by opting for a variable
interest rate.
Lendingkart Business Loan Interest Rates
At Lendingkart, we understand the needs of our customers and
therefore have devised a smart system based on analytics and
machine learning. The system allows us to offer customized interest
rates to our customer, thus ensuring that every loan application is
sanctioned with the lowest possible interest rate. Thus, relieving
MSME loan applicants from the dilemma of choosing between fixed
and variable interest rates and giving them the best of both worlds.
If you are looking for an online business loan, visit our website to get
a quick quote and apply for a business loan in a few simple steps.

8. Web: Lendingkart.com Phone: 07949067349