Since there is no collateral required for the unsecured business loan, the lenders will need to know whether you and your business have the financial standing to repay the loan amount. For this reason, the Fintech lenders could have a plethora of questions to ask you before agreeing to sanction your business loan. Questions are primarily asked to know about the business, use of the money in the business, the potential of the business, the level of understanding of the directors regarding the business, the commitments of the business owners, the market research of the business owners, the arrangements made by the directors for a serious business, and the method in which the loan amount shall be repaid by the business.
What are the important questions that may be asked by the Fintech lenders before processing your loan application?
- Why does your business require this loan?
You should be able to mention the reasons for which the company has to apply for the loan. All the reasons can be explained here but they should be logical and acceptable in nature.Your reason for getting the business loan could play a huge part in determining whether to grant you a loan or not.
- How much money do you need?
The Fintech companies or banks insist on knowing the amount of money that is needed by you for your business. The money that is mentioned should be reasonable and supported by a breakdown of how you plan to use it in various stages of development. The more systematically you show how much money you require with the required documents backing it, the chances of receiving a loan will be higher.
- What are your plans for using the money?
The business owner or the concerned official should be able to explain the objective and the business plan once the loan is received. It is recommended that the officials should prepare a detailed report that should exclusively mention the ways of how and where the funds will be disbursed once the financial assistance is received.
- Can you attach any collateral for the guarantee?
Fintech lenders would like to know if you are in a state of attaching any collateral to your loan application. It is true, that being able to attach any asset or property to the application increases the chances of the loans being granted. However, Fintech lenders also offer unsecured loans, where there is no need of attaching any collateral. These loans are granted on the basis of the merit of the business, its potential, and the credit record of the individual borrower.
- How can you summarize your business?
This question is asked to see the level of understanding the business owner has regarding his own business. The owner should be able to answer this question with a clear and reasonable objective.
- How will you repay the loan?
Your plan to repay the loan amount is the most important information a lender needs to know before granting you a loan. They need to feel convinced that you have a concrete plan on how you’d repay the loan amount. They want to feel assured that the risk involved in you defaulting on the loan is minimized.
Most Fintech companies provide unsecured business funding approval within a few days. With the increasing start-ups and small businesses, Fintech industry too experienced growth by providing loans to meet the financial needs of these organizations. With the emergence of Fintech companies, the leaders are expected to have a customer base of 40 % approximately. They are likely to expand its products and services to 56 % in order to meet the various demands.