IDFC First

IDFC First Business Loan

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Apply IDFC First Business Loan

IDFC Business Loan

IDFC which was incorporated in the year 1997 had its first registered office in Chennai. The Reserve Bank of India gave IDFC licence to form a non-banking financial company in the year 1998. IDFC Financial Holding Company was founded in the year 2014 to abide by the RBI guidelines and its five subsidiaries IDFC Bank, IDFC Securities, IDFC Alternative, IDFC MF and IDFC IDF is managed by the Holding Company.

Operations were started by IDFC Bank in the year 2015 with 23 branches across major cities in India. During October 2017 the 100th branch of IDFC Bank was inaugurated in Honnali, Karnataka. During December 2018 there was a merger between IDFC and Capital First Ltd and thereafter IDFC Bank was renamed as IDFC First Bank.

IDFC caters to corporate and private customers including infrastructure sector which was the specialised area since the establishment.  They offer business loans to both salaried and self-employed professionals/individuals and businessmen. These loans are very popular because of the quick time around for disbursal, competitive rate of interest and easy documentation and processing.

What is a business loan?

Capital is the main requirement for running a business. The entire capital investment could be by the promoters themselves. In case the promoters are unable to bring in the entire capital, they can bring a percentage of the capital required for the business and avail a loan for the rest of the requirement.

To enable funding of such capital investment banks and financial institutions provide loans to the business sector and such loans are called business loans. Business loans are provided for day to day operations of the business, for building infrastructure, expansion of the business etc.

IDFC Bank provides all-purpose loans which can be used for working capital requirements of the business, for upgradation of infrastructure or for expansion of the business to take the business to the next level.

Features of IDFC Business Loan

The following are the features and benefits of IDFC Business Loan

  • Purpose: The loan can be availed for working capital requirements of the business, for equipment upgradation, business expansion etc. 
  • Quantum: The quantum of the loan is between 3.00 lakhs to 75.00 lakhs. 
  • Interest: Competitive rate of interest starting at 9.80% p.a. The rate of interest depends on the stability of the business, turnover of the business, relationship with the Bank, credit score etc. 
  • Repayment: Can be repaid in flexible instalments up to 60 months. 
  • Security: No collateral security is required. 
  • Processing fees: Processing fees up to 3.5% of the loan amount will be collected. 
  • Pre-closure charges: The loan can be pre-closed only after paying EMI for 6 months. A pre-closure charge between 4% to 5% of the outstanding loan amount will be charged.

Benefits of IDFC Business Loan

The benefits of IDFC Business Loan are:

  • Simple processing and quick turn- around time.
  • No collateral security is required.
  • No hidden costs.
  • A one time processing charge will be collected at the time of availing the loan.
  • Simple documentation.
  • Competitive rate of interest and is charged on case to case basis. The rate of interest depends on the stability of the business, turnover of the business, relationship with the bank and the credit score.
  • Comprehensive Insurance cover is available for the loan.
  • Door-step serviced for picking up required documents is available.
  • With the IDFC Bank Mobile App you can get real-time updates of your loan account. You can check the loan account number, date of disbursement, loan amount, loan tenure etc. and can get the details of the outstanding loan amount, the next EMI date, balance tenure, etc. You can also download your loan account statement with this App. This service is available round-the-clock.

Types of IDFC Business Loan

The following are the different types of IDFC Business Loan.

Business Instalment Loan

The features of the Business Instalment Loan are as detailed below.

  • Purpose: Business Instalment loan can be availed for any business requirement like equipment upgradation, business expansion.
  • Nature of facility: Term Loan
  • Quantum: The quantum of the loan is between 3.00 lakhs to 75.00 lakhs.
  • Interest: Interest will be charged at competitive rates.
  • Security: No collateral security is required.
  • Repayment:  The maximum repayment period is 60 months.
  • Processing fees: Processing fees up to 3.5% of the loan amount will be collected.
  • Pre-closure charges: Pre-closure of the loan is permitted only after payment of 6 EMIs. Pre-closure charges from 4% to 5% of the outstanding loan amount will be charged.

IDFC Bank Business Instalment Loan for self-employed professionals/non-professionals

There are again 3 categories under this loan.

Loan to Doctors 

The features of this loan are:

  • Purpose: Doctors with MBBS, BDS and MDS qualification can avail this loan to improve their business.
  • Nature of facility: Term Loan
  • Quantum: The maximum loan quantum is 40.00 lakhs.
  • Interest: Interest will be charged at competitive rates.
  • Repayment: The loan has to be repaid within a maximum period of 60 months.
  • Security: No collateral security is required.
  • Processing fees: Processing fees between 2% to 3.5% of the loan amount will be charged.
  • Pre-closure charges: Pre-closure charges at 4% to 5% of the outstanding amount will be charged. Pre-closure of the loan will be allowed only after successful payment of 6 EMIs.

Loan to other professionals

The features of this loan are:

  • Purpose: This loan can be availed by Chartered Accountants, Architects and Company Secretaries further development of their business.
  • Nature of facility: Term Loan
  • Quantum: The maximum loan quantum available is 25.00 lakhs.
  • Interest: Interest will be charged at competitive rates.
  • Repayment: The entire loan has to be repaid with 48 months.
  • Security: There is no need to provide collateral security.
  • Processing fees: 2% to 3.5% of the loan amount will be collected as processing charges.
  • Pre-closure charges: Pre-closure of the loan is allowed only after payment of 6 loan instalments. 4% to 5% of the outstanding loan amount will be charged for pre-closure of the loan.

Loans to non-professionals

The features of this loan are:

  • Purpose: This loan can be availed by Proprietorship/Partnership firms, Closely held Limited companies and Private Limited Companies, Traders, Service Providers and, Manufacturers for upgradation/expansion of their business.
  • Nature of facility: Term Loan.
  • Quantum: The maximum quantum of loan available is 30.00 lakhs.
  • Interest: Interest will be charged at a competitive rate.
  • Repayment: The entire loan amount has to be repaid in 48 instalments.
  • Security: No collateral security is required for the loan.
  • Processing charges: Processing charges between 2% to 3.5% of the loan amount will be charged.
  • Pre-closure charge: Pre-closure charges between 4% to 5% of the outstanding loan amount will be charged. Pre-closure is permitted after payment of 6 EMIs.

Balance Transfer Facility

If you have business loan accounts with different banks and you are paying  comparatively higher interest, then IDFC bank offers the facility of transferring the outstanding balance of all the unsecured business loans. This will facilitate:

  • Consolidation of all the loans at a lower interest rate. Helps you get rid of keeping an account of the due dates of several EMIs.
  • You can pay one single EMI for all the loans put together.
  • Save on the cost of the loan by paying a lower rate of interest.

Cash Credit/Overdraft Facility 

  • This facility is given for working capital requirements for the business. The credit facility will be revolving in nature.
  • The assessment of the loan will be on the basis of business turnover.
  • The collateral terms are flexible.
  • Interest is charged at a competitive rate and will be charged only to the extent of the utilised amount and not on the sanctioned amount.
  • This facility will be renewed every year. 

Terms and Conditions of IDFC Business Loan

The following are the terms and conditions of IDFC Business Loan

  • The loan in terms of IDFC Bank means the facility of credit proposed to be availed by the borrower from the bank.
  • The rate of interest as applicable for the particular loan will be kept fixed for a specific tenure and will be charged on reducing balance.
  • A borrower can avail an Overdraft facility along with the Term Loan. Rates and fees as applicable for the OD facility will be charged by the bank.
  • The borrower/co-applicant can avail insurance cover against death of the primary borrower, critical illness or permanent disability of the borrower/co-applicant. The policy document and the premium paid receipts have to be deposited with the Bank. The insurance cover has to be obtained from the agency listed in the bank?s panel of insurance agencies.
  • The disbursement of the loan will be done by the Bank only on execution of all the documents as required by the bank, abiding by the terms and conditions laid down and on submitting all the KYC and other documents indicating the business/financial status as required by the Bank.
  • An undertaking has to be given that the borrower will submit any other documents other than the ones submitted as required by the Bank from time to time.
  • The repayment of the loan should be made at any of the branches of IDFC Bank or in places as notified by the Bank by way of standing instructions or by another method specified by the bank from time to time.
  • The repayment of the loan can also be done by ECS, Cheque payment, NACH of by auto-debit instructions.
  • IDFC Bank holds the right to permit pre-payment of the loan or change of tenure as required by the borrower as per the conditions prescribed by the bank from time to time. Pre-payment charges as decided by the Bank from time to time will be collected.
  • In case of any default in the loan, the Bank holds the right to recall the loan. The bank also holds the right to exercise any action as required for the recovery of the loan.
  • Copies of the documents will be provided within 10 days of placing the request.
  • The letter indicating the loan closure will be issued 15 days from the date closure of the loan.
  • Authorisation to the Bank for disclosing the information regarding details of your loan account for verification of credit/to cibil bureau should be given. 
  • Authorisation to send SMS to registered mobile regarding the introduction of new products/services by the bank should be given. 
  • In case of any dissatisfaction regarding the services offered by the Bank, the customer can contact place a complaint on their customer care website www.idfcbank.com or contact the nodal officer on the helpline number 1800-419-2332. 

Eligibility for IDFC Business Loan

The key criteria to qualify for IDFC Business Loan are:

  • The borrower should be within the age group of 23 years to 65 years.
  • Self-employed professionals, Partnership/Proprietorship firms, Closely held Limited Companies and, Private Limited Companies are eligible for the loan.
  • The vintage of the business should be at least three years.
  • The business should have been profit making at least for a period of 2 years.

Documents required for IDFC Business Loan

The following documents are required for IDFC Business Loan.

  • Proof of Address like Aadhar Card, Voters ID, Utility Bills, Passport.
  • Proof of Identity like Aadhar Card, Voters ID, Pan Card, Driving Licence.
  • Financial statements like Balance Sheet and Profit and Loss Account of the business certified by a Chartered Accountant or an Auditor along with Income Tax Returns for the previous two years.
  • 6 months bank account statement.
  • Proof for the continuation of business, like Trade Licence/GST Returns/Establishment certificate and Income Tax Returns.
  • Partnership Deed, Sole Proprietor Declaration, Memorandum and, Articles of Association certified by the Director and Original Board Resolution.
  • Photographs of the promoters.

Why Apply for IDFC Business Loan Through MyMoneyMantra?

It is always prudent to compare the offers by various banks/financial institutions in the market before deciding on availing a business loan. For this, the data for various lenders have to be collected and compared. This is a tiresome ordeal and will require a lot of time and energy. If you intend to make this loan availing process less tiresome and convenient then availing the loan through MyMoneyMantra will be the best thing to do.

MyMoneyMantra has the comparative data of various lenders in the market collated on a single page and you can visit their official website to compare the data and decide on the best deal. On filling the application, the representatives of MyMoneyMantra will take through the loan process from documentation till the approval.

How to Apply for IDFC Business Loan Through MyMoneyMantra?

Make use of the digital platfrom provided by MyMoneyMantra to avail IDFC Business Loan through MyMoneyMantra.

  • Visit the MyMoneyMantra website and choose the business loan from the dropdown list. Select the financial institution you intend to apply for the loan from.
  • Fill in all the relevant information required for applying for the business loan.
  • Once the filling of the application is complete and the process initiated the representative of MyMoneyMantra will contact you and guide you through the process of documentation etc., till the approval.

Formula to Calculate EMI

Equated Monthly Instalment consists of both the interest and the principal component. You should first arrive at the cash flow status of the business and decide on the affordable EMI level before applying for the business loan. On knowing the EMI level you can arrive at the nearest affordable amount by permutation and combinations with various loan tenure, interest rate and loan amount.

The formula to calculate EMI is

E = P x r x (1+r)n/(1+r)n-1
Here,
E is the EMI
P represents the principal amount
r stands for the interest rate offered on a monthly basis
n is the duration of the loan

After calculating the EMI and before applying for the loan you have to consider the following:

  • You study the business position and the available finances thoroughly before you decide on availing a business loan. You can think of various options like cutting operation cost, increasing sales, expanding the area of business and all other areas that would result in an improved cash flow level. Also, consider utilising the contingency funds. If none of this work then, going for a business loan could be the last option.
  • Have a business plan ready before you go for a business loan. The business plan should have the areas for which the funds from the business loan will be utilised. By doing so you will be clear about critical areas where the loan has to be channelised to take the business to another level. Building a good relationship with IDFC Bank will enable you to get funding for the next project immediately on clearing the loan availed for the present project.
  • Form a Think Tank comprising employees of all levels and plan a strategy for business growth. Pick the critical areas that require funding and that would improve the business growth. The next step would be to arrive at the level of requirement of funds. Borrowing funds more than required is not a prudential step. At the same time, funds not utilised for the purpose it was borrowed is also not worth it.

Business Loan Processing Fees and Charges 

The following are the fees and charges for IDFC Bank Business Loan. 

  • Interest starting from 9.80%p.a. onwards.
  • Processing charges between 2% to 3.5% of the loan amount.
  • Pre-closure charges of 4% to 5% of the loan outstanding amount.

IDFC Bank Customer Care Numbers 

In the case of any queries regarding IDFC Bank Business Loans, you can contact the following customer care helpline number 1800-419-4332-service available 24X7 

Frequently Asked Questions 

What is the business loan amount provided by IDFC Bank? 

The loan amount provided by IDFC Bank ranges from 3.00 lakhs to 75.00 lakhs. 

On what basis is the overdraft facility for a business assessed by IDFC Bank? 

The assessment for Overdraft facility is done on the basis of the business turnover by IDFC Bank. 

What are the different types of business loans provided by IDFC Bank? 

The different types of loans provided by IDFC Bank are Business Instalment Loan, Business Instalment Loan for professionals and non-professionals, Balance Transfer Facility and Working Capital Facility. 

What is the repayment period fixed by IDFC Bank for the loans provided? 

The maximum repayment period for repayment of the loan is between 48 months to 60 months. 

Name the entities eligible for IDFC Bank Business Loan? 

IDFC Business loan can be availed by: 

  • Doctors
  • Chartered Accountants
  • Company Secretary
  • Architects
  • Proprietorship Companies
  • Partnership Companies
  • Closely held Limited Companies
  • Private Limited Companies.

What is the eligible age to qualify for IDFC Business Loan? 

The applicant should be in the age group of 23 years to 65 years to qualify for the loan. 

Is business vintage a criterion to qualify for IDFC Business Loan? 

Yes, a business vintage of 3 years is required to qualify for IDFC Business Loan.

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