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ICICI YES BANK BIRLA INDIA BULL CAPITAL FIRST FULLERTININDIA

Business Loan

What is Business Loan?

Business loan is kind of personal loan people take for business purpose. It is also an unsecured loan. Individual or company if want to wide their business but running out of money can approach to Banks or NBFC’s for business loan. This is kind of debt that you have to repay the bank on particular tenure. There are so many banks out there who give business loan up to 30lakhhs. The interest rate basically depends on your companies’ yearly turnover, your CIBIL score and number of year your business is running of, your capability of repaying the loan amount you have applied for. It doesn’t take so much time to approve a business loan once you met all the eligibility criteria’s. The loan interest rate will be low if your amount of loan is big.

Types of Business Loan

There are two types of business loans. Secured Business Loan and Unsecured Business Loan-
  • Secured Business Loan

    - I In this business loan you have to mortgage any of your valuable assets to the bank so if you can’t able to repay your business loan on time bank will take your asset.
  • Unsecured Business Loan

    - Unsecured business loan is one of the most popular financial products available in the market. In this business loan you don’t have to mortgage any kind of your property or valuable asset. Bank gives you loan with minimum documentation, based on your portfolio.

Features of Business Loan

  • You can borrow from minimum 1lakh to 1crore.
  • You only can use this money for your business related purpose.
  • The repayment option is flexible.
  • The repayment time of a business loan from 6 months to 60 months.
  • There are so many options in loan amount and tenure based on your company size for you to choose.
  • The interest rate is low it starts from 13%
  • The documentation is minimum and if you apply online it is paperless too.
  • You can have co-applicant to get your loan easily.

Business Loan eligibility calculator

Parameters Criteria
Eligibility Self Employed Professionals- The applicants are practicing professionals with proper qualification proof and under the categorization of CA, doctor, architect etc. Self Employed non-Professionals- Private ltd companies, partnership firms, sole proprietors, public ltd companies etc.
Age 21-65 years.
Loan Amount 1lakh- 30lakhs
Interest Rate 13.00%- 22.00%
Loan Tenure Six months to sixty months
Age of business Self Employed Professionals- 3 years
Self Employed non-Professionals- 5 years
Annual Turnover Rs. 1 cr. and above
Banking Stabilization 6 months and above
CIBIL 650-950
Other Conditions Should own a house or work place

Business Loan eligibility Criteria

Self-Employed Non-Professionals

  • Age limit- Minimum age limit for the business person will be 21 years and Maximum age limit is 65 years.
  • Applicant should have minimum 5 years of experience in the business.
  • Applicant must have minimum 3 years of experience in the current business.
  • Business turnover should be a minimum of Rs. 40 lakhs.
  • The ITR report should be of a minimum of Rs. 1.5 lakhs per annum.
  • Last 2 year must experience profit to the business.
  • Following entities will be eligible for a business loan- Private Limited Companies, Partnerships, Limited liability partnership, closely held Limited Companies.

Self-Employed Professionals

The applicants are practicing professionals with proper qualification proof and under the categorization of CA, Doctor, architect etc.

Compulsory Testimonials for Business Loans

Self-Employed Non-Professionals

  • ID proof of the applicant- AADHAR card, PAN card, Voter ID card.
  • Residence proof- Utility Bills like Electricity bill, Gas bill.
  • PAN card of the company.
  • Bank Statement for the last 6 months.
  • An approved copy of Partnership Deed.
  • Verified copy of Memorandum and Articles of Association.
  • Business continuation proof- Sales Tax Certificate, Trade License.
  • Copy of ITR file for last three years.
  • Balance Sheet, Computation of Income, Profit and Loss statement for the last 2 financial years.
  • Age limit- Minimum age limit for the business person will be 21 years and Maximum age limit is 65 years.
Self-Employed Professionals
The applicants are practicing professionals with proper qualification proof and under the categorization of CA, architect etc.

How to improve the chances of getting business loan easily?

  • Improve your credit score

    People often accuse that they are not getting business loan but they have matched all the eligibility. What they don’t check is their CIBIL Score. If their CIBIL is lower than 650 they can’t get the business loan. So you should have to repay your EMI’s on time and your CIBIL will be high. Though it is a time taking process.
  • Don’t apply at so many places in same time

    When you apply for a business loan at same in so many places your loan approval can be rejected because each time bank refuses to give you loan that stays on your CIBIL report. So don’t do that. When a financial institution sees so many rejections they also rejected it for caution.
  • Choose your bank

    You have to choose your bank or NBFC’s very carefully there are so many Financial Institutions who gives Business loan but some of them charges high interest rate for no reason so you have to be careful before taking any step.
  • Existence of your business

    Basically bank gives unsecure business loans to those companies who are running from last three years and still going on well but if you are in a start up or your business is not going well on that case bank won’t give you an unsecured business loan.
  • Apply for a Business loan based on your capability.

  • Maintain your account regularly.

Name of Financial Institutions Interest Rate Processing Fees
ICICI Bank 16.49% Up to 2.00%
Capital First Business Loan 21.00% 2.00%
TATA Capital 18.00% Up to 2.50%
Fullerton India 16.00% 2.00%
YES Bank 16.25% Up to 2.00%

*Interest rates change time to time.

Points you should consider before taking a Business Loan

  • The loan amount

    - Don’t take so much amount at the end of the day you have to repay your loan so taking more amount than need is just wasting.
  • The interest rate

    - You should choose your financial institution carefully because there are so many institutions out there who are giving business loans on high interest rates so you have to choose carefully.
  • Processing Fee

    - The processing fees of banks varies. The processing fee is 2% or above. And some bank doesn’t have any kind of processing fee.
  • Prepayment Charges

    - Maximum bank has stopped taking pre payment charges but some banks still have. If you want to close your loan before the time bank takes a charge from you which is called pre payment charge so if you want to close your loan you should keep that on your mind.

Categories of Business Loan available in the market-

  • Term Loans
  • Overdrafts
  • Bill Discounting
  • Demand Loans
  • Letter of credit
  • Cash Credit
  • Bank Guarantee
  • Business Loan for women
  • Term Loans

    -There are three kind of term loans short term loan, long term loan and intermediate loan. You can avail a secured or unsecured term loan according to the situation of your business. These loans are helpful for achieving in long term assets. You can repay the intermediate loan on basis of monthly or quarterly. The interest rate of this kind of business loan either will be fixed or floating.
  • Overdrafts

    - In an overdraft home loan you can withdraw a larger amount from your account, and you have to repay this loan on time. This is a mutual understanding between the lender and borrower.
  • Bill Discounting

    - When you buy something expensive or you spend a large amount of money for buying something for your company by submitting all the important data’s you can get your cash back. Which is called bill discounting and you also get amazing offers.
  • Demand Loans

    -There are two types of Demand Loans- Secured Demand Loan and Unsecured demand loan. You can take it from bank or NBFCs but you have to repay it whenever they recalls. It will help you in your short term financial crisis. This loan will last maximum 12 months.
  • Letter of Credit

    - Commercial Documents, Certificate of insurance, Transportation documents, origin certificate, Inspection certificate.
  • Cash Credit

    - This is also an overdraft kind of loan. The tenure of this loan is twelve months.
  • Bank Guarantee

    - It is a secured loan offered by bank. In this case you have to mortgage your house or any other property to bank.
  • Business Loan for Women

    - To empower women there are so many financial products are available in the market they are- Annapurna Scheme, Stree Shakti Package, Bharatiya Mahila Bank, Dena Shakti Scheme, Udyogini Scheme, Cent Kalyani Scheme, Mahila Udyam Nidhi Scheme.

Benefits of Business Loan

There are so many benefits in business loan. First of all you don’t have mortgage your property for this kind of loan and you can take loan from 1lakh to 1crore as per your eligibility. Your CIBIL will be high. The rate of interest in business loan is pocket friendly. The process is hassle free and documentation are so minimum so what are you waiting for? Take a business loan and flourish your business. The main thing if you have any co applicant in your loan application it will be really helpful. The time tenure of this loan is also very impressive it starts from 6months and the maximum time is 60 months.

Mudra Yojna Business Loan

The Indian government has started to give loans to the small and medium sized business to enlarge their business, the interest rate for this loan is really low and almost every bank offer Mudra Yojna Business loan. Mudra Yojna Business loan gives so many offers so it is also an attractive opportunities to those people who are starting new business. The fund from this loan is transferred to the applicant’s account.

*Interest rate and Loan approval are subjected to band discretion and approval.

FAQ's

The borrower should be 21 years old or above.

Corporation Bank offers best business loan because their interest rate is so low.

Three factors effect in business loan interest rate-

  • High your loan amount interest rate will be low.
  • High your business turnover the interest rate will be low.
  • If your business is running for a long time the interest rate will be low.

Yes, CIBIL Score really effect on business loan interest rate. If your CIBIL is low or under 650 your interest rate will be high but if you have higher CIBIL your interest rate will be low.

  • Processing Fee

    The processing fees of banks varies. The processing fee is 2% or above. And some bank doesn’t have any kind of processing fee.
  • Prepayment Charges-

    Maximum bank has stopped taking pre payment charges but some banks still have. If you want to close your loan before the time bank takes a charge from you which is called pre payment charge so if you want to close your loan you should keep that on your mind.

Yes it will affect your co applicant’s CIBIL Score.

You will get business loan but it will be secured and your interest rate will be high.