You have made a personal investment till date in your business as it is more important in acquiring a loan. Banks are more inclined to give loans to business owners who have invested their own money in businesses and are therefore less likely to default on the loan.
Banks look very closely at the borrower's credit history, much in the same manner that they evaluate a potential borrower for a home loan or mortgage loan. If you have a good loan history and have repaid it quickly, it opens the door to obtaining other such loans much more easily, as you build up your credit rating and establish a relationship with the lender.
Term loans can be advantageous because you will have liquidity and greater financial flexibility while preserving your working capital. However, you must stay on top of the payment schedule. You will also want to be aware of all fees involved, which should be about one per cent of the overall loan.
Review in advance all the loan terms, including what fees will be charged. This will help you when shopping around for a loan and comparing not only interest rates, but the overall term loan package as well.
Photograph: Rediff Archives
Also see: How to pay off your home loan faster
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