If you are in travel business or planning, then these steps might help you out in your journey for loans & help you get loans easily.
Travel agencies may face a number of issues such as market ups and downs, seasonality of bookings, BSP Settlement, struggling to meet the daily operational expense, bulk orders, building a new travel facility (i.e. travel portal), paying its employees, pending payments from corporate clients etc. All these issues occur due to fluctuations or shortage of cash flows. So, to overcome this situation, a travel business can opt for a loan.
Now in the market, there are various sources available such as banks, digital lenders, and government institutions which are providing business loans for travel agencies. So, if you are in the travel business or planning to open one, have a look at these tips to make your loan journey easier and get the best travel business loan deals:
- Keep a good credit score: Before giving any kind of loan, a lender wants to know whether a travel business is capable of paying back the loan. For such a purpose, the basic data available in the market is the credit score of the borrower (i.e. travel agency). Lenders don’t have any other reliable information to measure a business’s credibility. A credit score is based on a borrower’s past borrowing record and how well they behaved while making payments. Depending on the score, a travel business will be deemed fit for a loan. Lastly, to secure a good loan deal from a lender a business should maintain a credit score above 700.
- How much you need & how you are allocating it for use: Lenders want to know exactly how much capital you require and exactly how you are planning on investing it. Any uncertainty in this matter won’t make a good impression on the lender. It may cost you a higher rate of interest or even rejection of your loan application.
- Be ready for 4C’s lenders look for: These are capacity to pay back the loan, current business condition, collateral to secure the loan if it crosses the specified limit, and character of the borrower means credit score and past relationship with the lender. Having these could get your travel business a loan easily.
- Target the right lender: A travel business can get a loan from banks, digital lenders, and NBFC’s etc. However, the process of application, the time consumed in processing, the credit conditions relating to payback may differ.
- Show sufficient cash flow: If your travel agency is already in business. You must be having a good cash flow to meet the requirements of EMI. A lender will ask for your past income tax returns, current debt level & depending on that they will project future cash flows. If they find you have a good cash flow to meet the payback requirements. Lenders will approve your loan application quickly.
- You should know the type of loan you require for your travel business: The Myth around the debt market, is that small amounts take too much time and higher interest cost. But if you know exactly how much loan you require and for how long. Then a business owner can easily decide the type of loan they require.
So, following the above footsteps can make your travel business loan journey easy. For easy lending, you can opt for digital lenders. We recommend you have a look at indifi’s digital lending platform. Their best fit loan solutions and flexible repayment will make borrowing worthwhile.