Business Loan Overview

A Business Loan is a financial product designed to help businesses access the necessary capital to fund various operational activities such as expansion, working capital, inventory, equipment purchase, or business setup. Whether you're a small start-up or an established enterprise, business loans provide the flexibility to manage cash flow and support growth.

Business loans can be secured or unsecured, depending on the lender's requirements and the type of loan chosen. Secured loans require collateral (such as property or assets), while unsecured loans don’t require collateral but may come with higher interest rates.

Key Highlights:

• Purpose: Can be used for business expansion, working capital, equipment purchase, inventory, or business establishment.
• Loan Amount: Varies based on business needs and repayment capacity.
• Repayment Period: Can range from a few months to several years depending on the loan type.
• Interest Rates: Competitive rates based on the borrower’s profile and the type of loan.
• Eligibility: Varies by lender, but typically requires a stable financial history and proof of business viability.

With flexible repayment terms, competitive interest rates, and tailored options, business loans are a crucial financial tool for business owners looking to scale their operations or manage working capital.

Business Loan Overview

1. Achieve High Business Loan Eligibility
   Before applying, it's important to prepare a solid business plan, check your credit score, determine the loan amount, research available business loan options, and gather the required documents.

2. Common Documents Required

• Proof of address and photo identity proof of the promoters
• Business proof and income proof
• Partnership deed for partnership firms
• Articles of association, memorandum of association, and board resolution
• PAN card, etc.

3. Criteria for Business Loan Approval

• Applicants should be between the ages of 21 and 65 years
• Minimum business vintage of 1-2 years
• Minimum annual turnover as per Income Tax Returns (ITR)
• The business should have been profitable for at least 1 year.

Features and Benefits of Our Business Loans

• Term Loans
• Working Capital Loans
• Business Expansion Loans
• Equipment Financing Loans
• Invoice Financing & Bill Discounting
• Machinery Loans

Eligibility Criteria & Eligible Entities

Business Type: Lenders offer loans to a variety of business structures, such as sole proprietorships, partnerships, limited liability companies (LLCs), corporations, and others.

Credit Score: A strong credit score is generally required to qualify for a business loan. Lenders assess your credit history to gauge your ability to repay the loan.

Business Age: Certain lenders may require your business to have been operational for a specified period, typically ranging from a few months to at least a year.

Annual Revenue: Lenders often set a minimum annual revenue requirement to ensure your business maintains a steady income.

Collateral: For secured loans, lenders may request assets such as real estate, equipment, or inventory as collateral to back the loan.

Cash Flow: Lenders evaluate your business’s cash flow to assess its ability to meet loan repayment obligations.

Age Criteria: Applicants must be at least 21 years old at the time of the loan application and no older than 65 years at the time the loan matures.

Eligible Entities: Individuals, MSMEs, sole proprietorships, partnership firms, public and private limited companies, limited liability partnerships, retailers, traders, manufacturers, and other income-generating business entities involved in services, trading, or manufacturing sectors (excluding farming).

Business Vintage: Businesses must have been operational for a minimum of one year.

Business Experience: Applicants should have at least one year of business experience, with the business location remaining the same.

Annual Turnover: The annual turnover requirement will be specified by the Bank/NBFC.

Credit Score: A preferred credit score of 700 or higher, as required by most private and public sector banks.

Nationality: Only Indian citizens are eligible to apply.

Additional Criteria: Applicants must own a residence, office, shop, or godown.

Documentation for Business Loans

The documents required to apply for a business loan vary depending on the type of business entity. Below is a general list of documents to be submitted to initiate the loan process:

• Income Tax Returns (ITR) for the last 2-3 years
• Bank Account Statement for the past 12 months
• Photocopy of PAN Card
• Address Proof for Residence: This can include documents such as Voter ID, Passport, Aadhaar Card, Telephone Bill, or Electricity Bill
• Address Proof for Business: Examples include a Telephone Bill or Electricity Bill for the business premises
• Provisional Financials for the last financial year and projected financials for the upcoming year
• Company Business Profile on company letterhead
• Photographs: Two recent photographs of the promoters and property owners
• Sanction Letter and Repayment Schedule for any existing loans
• GST Registration Certificate and GST returns for the past two years
• D-Vat/Sales Tax Registration Copy
• Udhayam Aadhaar Registration Certificate
• Rent Agreement Copy for factory and residence (if the property is rented)
• Business Continuity Proof: Documents like 3 years of ITR or company registration as evidence of continuity
• For Private Limited Companies:
  • Company PAN Card
  • Certificate of Incorporation
  • Memorandum of Association (MOA)
  • Articles of Association (AOA)
  • List of Directors
  • Shareholding Pattern
• For Partnership Companies:
  • Partnership Deed
  • Company PAN Card

Fees and Charges for Business Loan

The fees and charges for business loans can vary based on the lender and specific circumstances. Below is a general overview of the typical fees and charges associated with business loans:

These fees and charges may vary depending on the lender's policies, so it's important to confirm specific details with your chosen lender before proceeding with the loan application.