Business Loan
Business Loan is a 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 30lakhs. 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.
SME Loan (Small Medium Enterprise) is also kind of Business Loan. You can avail SME Loan in India
easily online. SME Loan Rate of Interest are very low. Availing SME Loan online is very easy and
through a SME Loan for new business you can avail loan up to Rs. 2cr. If you need a hassle free
digital experience without worrying and want minimal documentation SME Loan Apply Online is the
best way to do it. You can opt for both SME Unsecured Loan and SME unsecured Loan whichever is
easy for you. SME Loan Interest Rates are low from other Business Loan and it is specially
designed for Small and Medium Business enterprises. If you are a resident of India you can easily
avail SME Loan in India.
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Features of Business Loan
- The repayment option is flexible.
- The interest rate is low it starts from 13%*
- You can borrow from minimum 1lakh to 1crore.
- You only can use this money for your business related purpose.
- 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.
- SME Loan rate of Interest are very low.
- You even can avail SME Loan for new business.
- You can have co applicant to get your loan easily.
- You can avail SME Loan online easily by just clicking some buttons.
- The documentation is minimum and if you apply online it is paperless too.
- If you don’t want to mortgage any of your property you can easily opt for SME Unsecured Loan.
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Types of Business Loan
Secured Business Loan
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.
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.
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 | 1 lakh- 30 lakhs |
| Interest Rate | 13.00%*- 22.00%* |
| Loan Tenure | 6 months to 60 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 | 750-950 |
| Other Conditions | Should own a house or work place |
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
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.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.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.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.Benefits of Business Loan
Business Loan is a kind of personal loan people take for
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.
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Categories of Business Loan available in the market
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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.
Did You Know?
. What are the categories of Business Loan available in the market?
Ans:
- Term Loans
- Overdrafts
- Bill Discounting
- Demand Loans
- Letter of credit
- Cash Credit
- Bank Guarantee
- Business Loan for women
.Which factors may effect on my business loan interest rate?
Ans: 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.
. Which Bank is best for Business Loan?
Ans:Corporation Bank offers best business loan because their interest rate is so low.
. Does CIBIL Score effect on my Business Loan interest rate?
Ans: 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.
. What are the other charges for business loan?
Ans:
- 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.
. Does it affect my co-applicant if I default in business loan?
Ans:Yes it will affect your co applicant's CIBIL
Score.
. I have bad credit score. Am I eligible for Business Loan?
Ans:
You will get business loan but it will be secured and your interest rate will be high.
. What are the documents require for Business Loan?
Ans:
- 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.
