The growth and sustainability of a business depends on the continuous inflow of funds. The funds might be required to expand the business or purchasing equipment. The funds can be borrowed in the form of a loan from banks and other financial institutions. Business Loans are typically unsecured in nature which means no collateral or security is required to borrow a loan. Business Loan is a debt provided to the company or the self-employed professionals or business owners that are to be repaid along with the principal amount. The rate of interest is usually pre-determined by the lending institutions. A Business Loan in India is offered at competitive interest rates, with a low processing fee, and without any security or collateral. Several leading banks and NBFCs including HDFC Bank, ICICI Bank, Capital First, Citibank, Fullerton India, Tata Capital, and so forth are offering business loans.
A Business Loan can be better understood with the help of the table below:
|Business Loan Interest Rate||Competitive interest rate starting at 12.15%|
|Nature of Business Loan||Unsecured (No mortgage required)|
|Loan Tenure||Ranges from 24 months to 60 months|
|Processing Fee||Up to 2% of loan amount|
Term Loans: Term Loans could be used for business expansion or capital infusion requirement of an organization. Generally, a term loan is the loan offered for the acquisition of long-term fixed assets including land or building, machinery, and other business needs. The interest rate can be either fixed or floating and are usually have a fixed repayment schedule.
Special Business Loan Scheme for Women Entrepreneurs: Today banks are offering attractive business loan scheme for women entrepreneurs at low rates of interest. However, women entrepreneurs who have business ownership of less than 50% are not eligible for special loan schemes.
Working Capital Loans: These types of loans are offered to meet the daily operating expenses of the business. These loans can be further classified as secured and unsecured loans.
There are certain important eligibility factors for Business Loan. The following factors are:
|Who can apply?||†|
|Business Profitability||Business should be in the profitable state for at least 3 consecutive years.|
|Company Financials||Complete financials including Balance sheet and Profit & Loss statement for latest 2 years, Tax audit reports.|
|Credit Score||Good Credit Score (650 and above)|
The following documents are required for taking Business Loan:
|Type of† †Document||†|
Any one of the following:
Any one of the following:
|Ownership† †Proof||Proof of ownership of residential or commercial property (including parental property)|
|Financials||Complete financials including Income Tax Return of latest 2 years, Balance Sheet, Profit and Loss Statement, Tax audit reports, and so forth.|
|Other† † Documents||†|
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Note on part prepayment
Amount - How much do you want to part prepay?
Month - When do you want to prepay? If you availed your loan in Jan’16 and want to part pay in Jan’17, then please enter 12 months.