Key Steps to Get a Small Business Loan

May 23, 2024
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What is a Small Business Loan?

A business loan is a form of financing that can help a company resolve cash flow issues, capitalize on growth opportunities, and increase its overall turnover. Small business loans in India are particularly significant, as they allow small businesses to access funds that would otherwise be unavailable, enabling them to invest in equipment and inventory, hire more staff, and drive marketing and advertising efforts. They can also be used to finance expansions and renovations or repairs, as well as to cover the cost of keeping inventory, allowing businesses to remain competitive and make the most of market opportunities. Small business loans can provide a much-needed financial lifeline during difficult times, enabling businesses to weather the storm and stay in operation.

Why Small Business Loans are a Necessity for MSME Growth

In addition to helping small businesses achieve immediate goals, small business loans in India can help micro, small, and medium enterprises (MSMEs) achieve their long-term goals, such as expanding into new markets, launching new products and services, and increasing their customer base. Another significant benefit of small business loans is that they can help businesses build their credit. Since the loans are typically repaid over a period of time, they can help establish a good credit history. This can be invaluable for businesses that need to obtain additional financing in the future and can increase their chances of approval. Banks and other lenders often require extensive paperwork and a long waiting period before approving a loan. Small business loans, however, are easier to obtain and can provide quick access to funds.

In many cases, MSMEs do not have the resources to acquire traditional financing and must rely on alternative sources of funding. Therefore, Non-Banking Financial Institutions (NBFCs) like Kinara Capital provide access to these funds, allowing small businesses to invest in their operations and increase their chances of success. However, it is critical to plan ahead of time for a loan and understand the documentation required by a lender when you apply for small business loans. Wondering how to get a small business loan? MSMEs can obtain a small business loan by applying to a business lender and providing the necessary details and documentation. NBFCs like Kinara Capital provide collateral-free Business Loans to MSMEs to help them grow and expand their businesses. Here are 8 simple steps that help in getting a small business loan.

8 Key Steps in Getting a Small Business Loan

Here are the 8 key steps you should take in order to get a small business loan:

1. Have a Business Plan

Before you apply for a small business loan, it’s very important to have a business plan in place to get a good understanding of how much funding you need and why. Without a well-thought-out strategy in place, it’s easy to lose track of your finances and end up squandering the loan amount without financing necessities and fuelling growth. Having a business plan reassures the lender that you will make proper use of the funds, instilling confidence in you as a borrower.

2. Check your Credit Score

Your credit score shows how creditworthy you are. Traditionally, it was considered one of the main ways to gauge how trustworthy you are with borrowing money, but this has since changed. Credit score ranges from 300 to 900, and lenders use it to decide if they should lend you money. A higher score means you’re more likely to get approved for loans and credit cards with better terms, like lower interest rates. Check your credit score regularly, and make sure you play your loan EMIs and dues to keep it healthy.

3. Update your Financial Statements

Lenders will look into your financial statements before deciding whether to give you a loan. So make sure that your statements are up to date and accurately reflect the financials of your business. Lenders have ways to verify these details, so if you are found to be misrepresenting them or there are mistakes, you are likely to be disqualified from getting a small business loan.

4. Choose Right Type of Business Loan

There are various categories of business loans, including machinery purchase loans, working capital loans, and bill discounting loans. Carefully consider your requirements, as well as the terms and conditions of the loan before you opt for one. To get a small business loan that suits your needs is the first step to properly utilising the funds for your business growth.

5. Research on Lenders

Choosing the right lender is a crucial part of the loan process. A variety of financial service providers offer small business loans, and it’s essential to do your due diligence before you choose one. Take into consideration factors like whether it is a properly regulated, registered entity, if the terms and conditions are fair and transparent, and what kind of reputation they have in the market. These steps will help you properly service your loans and build a long-term relationship with the lender.

6. Check Eligibility

Once you have selected your lender, check the eligibility criteria that they have for applying for a small business loan. Make sure that you adhere to these criteria before you apply, otherwise, your loan application will get rejected. Each lender can have differing eligibility criteria, so go through them carefully.

7. Gather Documents

You will require a set of documents for business loan. These include identity proof, business financials, certifications, etc. Find out which documents your lender requires and keep them handy when applying for your small business loan. This will speed up the process and up your chances of being approved.

8. Apply for Business Loan

The final step is to apply for business loan. Once you have determined what kind of loan you need, identified the lender you want to go with, and gathered all the necessary documents, go ahead and put in your loan application. If everything is in place, you will have your business loan in no time.

Types of Small Business Loans at Kinara Capital

Kinara Capital, an RBI-registered NBFC, offers a range of collateral-free loans catered to the needs of MSMEs, which are disbursed in just 24 hours, with minimal documentation. Here are the types of small business loans Kinara offers:

1. Working Capital Loan:

Cash flow is the lifeblood of any business, so having access to capital is critical. Businesses, especially micro, small, and medium enterprises (MSMEs), can struggle to keep their operations running if they do not have enough capital. Thus, to maintain stable working capital, MSMEs may need to avail of working capital loans. At Kinara Capital, businesses can apply for small business loans, and get collateral-free Working Capital Loans to cover their business’s short-term operational needs. These loans can assist them in maintaining a consistent cash flow, seizing new opportunities or orders by purchasing raw materials on time, and facilitating cyclical sales for companies that rely on seasonal business. MSMEs can easily take a 1-minute eligibility check for a working capital loan on Kinara’s website or myKinara App and move one step closer to receiving a Small Business Loan.

2. Machinery Loan:

MSMEs looking to finance equipment or machinery for their business can use an Machinery Loan from Kinara Capital to help support the purchase. This loan can be used to refurbish, modify, or replace existing machinery or equipment. Upgrading or repairing defective machines or appliances can also help improve the quality of the products. This increased quality will result in improved customer satisfaction, which can lead to more orders or an increase in sales. Additionally, the loan can be used to purchase new machinery or equipment, which can help streamline production processes and optimize costs. The loan also provides flexible repayment terms, allowing businesses to manage their finances better and stay on track with their payment schedule. All in all, Machinery Loan from Kinara Capital can be a great way for MSMEs to finance the purchase of machinery and equipment for their business.

3. HerVikas Loan:

Kinara Capital has made it easier for women to get small business loans. This RBI Registered Systemically Important Fintech firm in India is aware that getting loans can be difficult for women entrepreneurs due to cultural biases and other systemic issues. Keeping this in mind, Kinara has come up with the HerVikas Program that offers women entrepreneurs a 1% discount on the loan interest rate without submitting any additional documents. The scheme has made it much easier for women to get finances from Rs. 1 lakh up to Rs. 30 lakhs for business expansion. It is a great step towards bridging the gender divide in the financial sector and promoting women entrepreneurs. Kinara has taken the initiative to provide business loans at convenient terms with minimal paperwork and a fast disbursal process. This scheme is a great way to boost women entrepreneurship in the country and enhance their economic participation.

Grow your MSME with collateral-free business loans

Step-by-step Online Application Process

Now let us come to the most important part: how to get a small business loan. At Kinara Capital, we have a fully online application process. All you have to do to get a loan is follow these steps:

Quick Eligibility Check: In less than a minute, you can find out if your business qualifies for the loan! You can access the eligibility check in seven different languages available on our website for a seamless experience.

Screening: The business and the entrepreneur are screened by validating the KYC and registration details.

Document Upload: You need to submit your KYC, applicant, co-applicant, business KYC (ID and address proof), applicant PAN Card, business registration document, last 12 months’ bank statements, GST registration (if available), and business vintage proof.

Loan Approval: Once you complete the process, your loan application will be reviewed, and if everything is in place, the Kinara officers will approve your loan.

Disbursement: Once your loan is approved, you will receive the loan amount directly in your account within 24 hours.


Small business loans are an important source of financing for MSMEs to grow their businesses. They offer a variety of loan products, including term loans, working capital loans, and equipment loans, that can help MSMEs access the necessary funds to expand their operations. Small business loans from NBFCs also offer several benefits, such as minimal documentation, faster processing of applications and disbursement, etc. Small Business Loans from NBFCs are particularly beneficial for MSMEs as they provide access to capital at a much lower cost than traditional banking loans. This is due to the fact that NBFCs do not require as much paperwork and are more flexible in their lending criteria, allowing them to approve loans more quickly.

Additionally, NBFCs offer a wide range of loan products that cater to the specific needs of small businesses, allowing them to access the capital they need to grow their operations. Furthermore, loans from NBFCs are often tailored to the specific needs of MSMEs and can be used to purchase equipment, hire new staff, purchase inventory, and expand operations. This flexibility makes it easier for MSMEs to access the capital they need to grow their businesses. NBFCs offer competitive interest rates, flexible repayment terms, and quick disbursement of funds, making them an attractive option for MSMEs. NBFCs like Kinara Capital are the answer to the capital need faced by MSMEs in India as they make getting small business loans easy and smooth.


How can I get a loan for a small business?

If you are a small business owner, you can get a loan by registering your business and then approaching a lender that offers loans for small businesses and applying for the right category of loan you need.

How do I qualify for a small business loan?

You can qualify for a small business loan if you are the owner of an MSME. You can improve your chances of getting loan approval by choosing the right lender, having a solid business plan and good credit history, and meeting lender’s eligibility criteria.

How much can I borrow with a small business loan?

The amount you can borrow under a small business loan varies based on factors like the lender’s policies, the financial health of your business, and the purpose of the loan.

Can I get a small business loan with bad credit?

New-age lenders like fintech NBFCs now consider a number of factors other than credit score to gauge creditworthiness, so even if your credit score is not great, you have a chance to get a small business loan. However, it could make it difficult and the terms might be less favourable.

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