Business Loan (BL)
Business loans are designed to help small businesses and entrepreneurs meet their capital requirements. You can avail business loan, if you wish to raise capital to start a business of your own. There are over 20 financial institutions in the country offering tailored business loans at attractive interest rate to suit your financial needs.
Why is a Business Loan Important?
It requires a significant amount of capital to start a business of your own and in such situations, applying for a business loan is a good idea. A business loan will allow you to purchase the necessary equipment, workforce, and funds for expansion purposes.Thus, there are banks in India which offers business loan at flexible interest rates. You must conduct your own research to avail yourself of the most suitable business loan.
Business Loan Features :
- Term Loans
- Working Capital Loans
- Business Expansion Loans
- Equipment Financing Loans
- Invoice Financing & Bill Discounting
- Machinery Loans
Business Loan Eligibility and Documents :
Read on to know the criteria required to apply for our Personal Loan.
Business Loan Eligibility Criteria :
- Business Type: Most lenders provide loans to various types of businesses, including sole proprietorships, partnerships, limited liability companies (LLCs), corporations, and more.
- Credit Score: A good credit score is often required to qualify for a business loan. Lenders use your credit history to assess your ability to repay the loan.
- Business Age: Some lenders require a minimum operational history for your business, usually ranging from a few months to a year or more.
- Annual Revenue: Lenders may have a minimum annual revenue requirement to ensure your business has a stable income.
- Collateral: Secured loans might require assets as collateral to secure the loan. Collateral can be real estate, equipment, inventory, or other valuable assets.
- Cash Flow: Lenders often evaluate your business’s cash flow to determine your ability to repay the loan.
- Age Criteria: Min. 21 years at the time of loan application & Max. 65 years at the time of loan maturity.
- Eligible Entities: Individuals, MSMEs, Sole Proprietorships, Partnership Firms, Public and Private Limited Companies, Limited Liability Partnerships, retailers, traders, manufacturers, and other non-farm income-generating business entities engaged only in the services, trading, and manufacturing sectors
- Business Vintage : Min. 1 year or above
- Business experience: Min. 1 year, business location to remain same
- Annual Turnover: Shall be defined by the Bank/NBFC
- Credit Score: 700 or above (Preferred by most private and public sector banks)
- Nationality: Indian citizens
- Additional Criteria: Applicants must own either a residence, office, shop, or Godown.
Documents required to apply for Business Loan :
The list of documents required for a business loan to be submitted varies based on type of business entity. Submit the following documents to begin with the loan process:
- ITR for the past 2-3 years
- Current Bank Account Statement for the last 12 months
- Photocopy of PAN Card
- Address Proof for Residence such as Voter Card, Passport, Aadhaar Card, Telephone Bill, Electricity Bill
- Address proof for Business such as the Telephone Bill or Electricity Bill
- Last Financial Year’s provisional Financials and future year’s projections.
- Company’s business profile on the letterhead
- 2 photographs of promoters and property owners.
- Sanction letter and Repayment schedule of existing loan
- GST registration certificate and GST returns of latest 2 years.
- D-Vat/Sale tax registration copy
- Udhayam Aadhaar registration certificate
- Rent agreement copy of factory and residence (if property is rented)
- Business Continuity proof of 3 years (3 years old ITR/Company registration etc)
- Company PAN Card, Certificate of Incorporation, MOA, AOA, List of Directors, and Shareholding pattern for Pvt Ltd companies
- Partnership Deed, Company pan Card for Partnership Companies
Fees and Charges for Business Loan :
The fees and charges of business loans usually vary from lender to lender and from case to case. The aforementioned table will give you a fair idea of the fees and charges related to business loans:
- Loan Processing Fees : 1.5% to 5% of Loan Amount
- Loan Cancellation : Usually 0 to 5% of Loan Amount
- Stamp Duty Charges : 60/- to 600/-
- Legal Fees : Nil
- Penal Charges : Nil
- EMI / Cheque Bonus :Approx 499/- to 599/-