LendingKart

LendingKart Business Loan

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Apply LendingKart Business Loan

LendingKart Business Loan

LendingKart Finance Limited is a Non-Banking Finance Company (NBFC) started with the main aim to provide SME finance without elaborate procedures at the quickest possible time. They are currently based in Ahmedabad, Bangalore, and Mumbai but they offer services across the country.

Unlike banks and other financial institutions, they do not focus much on the past performance of the business but render more importance to the current cashflow and status of the business. Their main aim is to provide quick funds to small and medium enterprises (SMEs) to enable them to focus on the business growth instead of channelising their time and energy in worrying about the cash flow gaps. Their loans are devoid of complicated and rigid rules, unlike the bank loans which make the loan processing quick and simple.

What is a Business Loan?

A Business Loan is funding from banks/financial institutions only for the business purpose. A debt is created which has to be repaid along with interest and should be used only for day to day operations of the business, creating infrastructure for business or for expansion of the business.

There are various types of Business Loans. Both secured and unsecured Business Loans are offered by banks/financial institutions. Working Capital limits that are mainly for running the operations of the business is provided which will be revolving in nature. Interest will be applied only on the portion of the amount utilised.

Term Loans for creating capital assets which have to be repaid in a specified tenure are also provided. The assets created out of the funds will be the collateral security for the loan.

Loans are provided for creating infrastructure for the business. It could be for erecting a building and then installing machinery required for the business. Loan for creating infrastructure will also be a Term Loan which has to be repaid within a specified tenure.

LendingKart has developed a technology tool to assess the creditworthiness of the borrower. The main aim of LendingKart is to provide short term hassle-free loans to SMEs without insisting for collateral security.

Features and Benefits of LendingKart Business Loans

The features of the LendingKart Business Loan are as mentioned in the table below:

Features Description

Purpose of the loan

  • Working capital finance for day to day operations of the business.
  • Term Loans to build infrastructure for the business and for expansion of the business.

Quantum

The minimum quantum of loan is 50,000 and the maximum quantum of the loan is 2 Crores (depends on the type of loan and creditworthiness of the borrower).

Interest

Customised interest rates ranging from 15% to 27% p.a. Interest rate is based on the annual turnover, cash flow and the health of the business.

Repayment

The loan amount along with interest has to be repaid within a maximum tenure of 2 years. Instalments can be paid either monthly or fortnightly.

Security

No collateral security is required

Processing charges

One-time processing charges at 1% to 2% of the loan amount

Pre-closure charges

Nil. Pre-closure allowed only after full payment of the first EMI

Benefits of LendingKart Business Loans are:

  • Quick processing: The application process is 100% online. The technology tool devised to assess the creditworthiness of the borrower makes the loan processing much easier. A loan provided at the right time will enable the entrepreneurs to explore the ambit of scope for their business and exploit the opportunities. And this is what LendingKart is aiming at. Their online loan application process has eradicated manual intervention to a large extent and has made the processing faster and has taken the loan processing procedure to a new level. This enables approval of the loans on the same day of receiving the online application.
  • No collateral required: LendingKart does not insist on collateral security for providing a loan. So, you need not mortgage your valuable assets or company stock and constantly worry about losing the ownership of the assets in case of eventualities in the business. This gives you a clear mind which enables you to focus on the business growth thus enabling you to increase the profit level of your business.
  • Enables streamlining of business cash flow: By providing funding at the right time it enables you to increase the arena of opportunities and focus on business growth instead of channelising your time and energy worrying about the working capital gaps. It provides funding which can be paid in easy instalments which enable balancing the business fund and company capital fund.
  • Helps to improve the credit score: If the credit score of your business has declined due to unpredictable market conditions, then a Business Loan from LendingKart is the right option to improve your credit score. The loan details are reported to all credit bureaus periodically which will enable to build a credit history.
  • Loan tenure: The loan tenure can be chosen as per your business behaviour. If the going is good then you can repay your loan earlier with their fortnightly EMI option. Otherwise, you can choose longer loan tenure to arrive at the EMI as per your affordability.
  • Interest rates: The interest rate is fixed on case to case basis. The rate depends on the annual turnover, cash flow and the health of your business which makes it the best rate available in the market.
  • No hidden costs: LendingKart charges only a one-time processing fee of 1% to 2% of the loan amount. There are no other hidden costs other than this. The cost of the loan is maintained at a low level on account of this.

Types of LendingKart Business Loans

The following are the different types of LendingKart Business Loans:

Working Capital Loan

LendingKart offers a customised working capital loans for SMEs and start-ups for funding their working capital requirements. This loan helps you in easily running your everyday business operations without worrying about funds. This loan usually covers recurring expenses like accounts payable, wages, and so on.

These loans are of two types, viz. secured and unsecured. While secured loans need an asset as collateral in lieu of the loan extended to your business, unsecured loans rely on your business's financial health for sanctioning the loan amount.

Loan amount  

50,000 to 2 Crores

Tenure

1 to 24 months

Interest rate

15 to 27% p.a., depending on borrower's credit profile

Processing fee

Up to 2%

Following are the 6 most common working capital loans types for SMEs:

Bank Overdraft/ Credit Line

Under this, banks or other financial institutions provide a pre-approved withdrawal limit on your current account. Prerequisites for this loan include your long working relationship, a reasonable loan amount, and good credit score. Interest is charged only on the amount utilised, even if a higher limit was sanctioned to you. However, the rate of interest for this loan is generally 1 to 2% higher than the lending institution's prime rate.

Equity Funding

For this type of funding, business owners can acquire funding through personal resources/ investors, such as investment through friends or family. These loans are mostly availed by start-ups and businesses having a less than ideal credit score.

Short-term Loans

These are just normal working capital loans, sanctioned at a fixed rate of interest with short repayment tenure of up to 1-year. These loans are generally secured in nature and may also have other policy requirements like revenue or sales targets to be followed by you.

Loan on Accounts Receivables

These loans are sanctioned against the confirmed value of sales order. If you've a reliable customer base, this kind of loan is ideal for your business as there is always a risk involved of invoice defaults. Financial institutions are hesitant to provide these loans to new businesses.

Factoring/ Advances

Similar to the accounts receivable loan, this loan variant is offered against your future credit card receipts and not on confirmed sales. However, it is only suitable for a business which accepts credit card payments.

Trade Creditor

This loan facility is offered by a current or new supplier on placing bulk orders. Trade creditors usually have their strict policy parameters that are to be followed by the borrower.

Business Loan

Business Loans help in the growth of your small business by allowing you to invest in operations, infrastructure, and plant & machinery. Moreover, these loans can also be a useful for critical business operations. Customised Business Loans are tailored to meet some specific needs of a new age business/ start-up.

LendingKart offers customised Business Loans to SMEs in India. The loans are free from any bureaucratic red tape and have a straightforward application, approval, and disbursal process.

Loan amount  

50,000 to 2 Crores

Tenure

Up to 2 years

Interest rate

15 to 27% p.a., depending on borrower's credit profile

Processing fee

1-2%

Following are 6 most common Business Loan types for SMEs:

Bank Overdraft/Creditline

Banks and online lenders provide this facility. This is a revolving facility wherein funds to the extent of sanctioned limit can be withdrawn from a business account even when the balance is lower. Interest will be charged to the extent of the amount utilised. The amount can be deposited along with the interest with which the limit will be replenished and will be available for utilisation as and when required. This is commonly used for working capital requirements.

Equity Funding

For this type of funding business owners can sell the Company share in exchange for the capital investment with an option to repurchase the same once the loan is repaid. But this type of funding is not very popular in India as it involves dilution of ownership.

Short-term Loans

Short term loans are loans that are to be repaid within 3 to 18 months. This loan is generally provided for working capital finance or for capital investment. The loan amount will generally be small as the repayment period is very short. LendidngKart provides short-term loans with a tenure of 1 to 24 months.

Equipment Finance

This is a term loan provided for the purchase of equipment required for the business. This is a secured loan as the assets purchased out of the finance will be hypothecated to the lender. The ownership rights rest with the lender and the authority to sell the asset in case of default of the loan.

Loan on Accounts Receivables

This loan is also called Invoice Financing. It is provided against hypothecation of receivables for a short-term. These loans have a restriction as in it can be provided only for SMEs who have dealings with commercial customers.  The tenure of the loan coincides with the due date of the invoice. On the due date of the invoice, the entire loan amount along with interest has to be repaid.

Factoring/ Advances

Factoring or debtor servicing is when the invoices of a Company are bought by another Company and the payment of the invoices if followed up by the Company who buys the invoice.The amount will be paid in advance to the Company against the invoices. The entire invoice amount will not be paid. A loan will be given only to the extent of 70% to 90% of the invoice amount. In this type of loan both the service provider and beneficiary will be involved and will have to work with the Factoring Company.

Trade Creditor

A service provider or a supplier of goods who is yet to receive payment is called the trade creditor. This arrangement of services and supplies on credit for a specified period is a common feature in businesses. This amount due to the supplier or service provider can be considered as a short- term Business Loan.

MSME/ SME Loan

Micro, small and medium enterprises (MSME) and small and medium enterprises (SME) Loans are the same. These are offered to businesses falling under MSME or SME categories. These loans are normally given to start-up owners, small business owners, and women entrepreneurs for short-term. The duration for these loans differs from lender to lender. These are unsecured loans; hence, they involve some minimum eligibility requirements to reduce the risk for lenders.

LendingKart offers special MSME and SME Loans to businesses which are in need of quick finance in India. The loans are approved online, helping in speeding up the delivery of funds.

Loan amount  

50,000 to 1 Crore

Tenure

Up to 12 months

Interest rate

15 to 27% p.a., depending on borrower's credit profile

Processing fee

1-2%

Following are 5 most common ways to utilise these loans:

Inventory Management

It is a critical part of all small businesses as their profit depends on the sale volumes. You can use the MSME Loan to secure inventory supply chain, replenish existing stock, manage seasonal dips, or to buy new product samples for sale.

Purchasing Plant and Machinery

You can use these loans to purchase new equipment. Investment in purchasing plant and machinery needs heavy funding. You can get up to 1 Crore under MSME Loan for expanding your business operations without straining your company's capital fund.

Working Capital Management

These loans can be used to cover your everyday business operations and recurring expenses such as accounts payable, wages, etc.

Consolidate Your Business Debt

MSME Loans allow you to consolidate your smaller debts under a single EMI, reducing the strain on your monthly budget. It also helps in aligning debt repayment with invoicing schedule. By consolidating business debt, you can reduce the amount you are currently paying on sundry debts.

Invest in Marketing

Marketing helps in the growth of your business by increasing its outreach. However, marketing is an expensive affair and requires investment. With MSME/ SME Loans you can successfully run such a campaign.

Business Loan for Women

There is a phenomenal growth in India's MSME sector. It contributes above 45% of our industrial output and a part of this success story is contributed by women entrepreneurs of the country. Traditionally, it was hard to secure business finance for them due to some social stigmas. However, with the emergence of FinTech platforms and the recent evolution in business finance, it has become easier for women entrepreneurs to avail business loans.

LendingKart is a great platform for women entrepreneurs who are looking for a business loan as the whole process is quick, reliable, and allows personalised loan terms for every business.

Loan amount  

50,000 to 1 Crore

Tenure

1 to 12 months

Interest rate

15 to 27% p.a., depending on borrower's credit profile

Processing fee

1-2%

Terms and Conditions of LendingKart Business Loan

The following are the terms and conditions of LendingKart Business Loan:

  • The terms and conditions listed out in the LendingKart Group Website are applicable on loans applied for through the Group Website.
  • The terms and conditions may be modified from time to time and the borrower is bound by such modified terms and conditions that are applicable from time to time.
  • Group NBFCs/Banks hold the discretion for making a favourable credit decision which is subject to the execution of necessary documents, providing securities and any other formalities laid down by the financial institution concerned.
  • The Group NBFCs reserve the right to reject the application without furnishing reasons for the same and the applicant is bound to accept the decision.
  • LendingKart has the rights to call for any other additional information or documents required apart from the ones already submitted.
  • LendingKart has the rights to retain the documents and photographs submitted along with the application.
  • There should be no proceedings for insolvency against the applicant and the applicant has to give a declaration to that extent.
  • An undertaking from the applicant that any change in employment or occupation will be informed to LendingKart and any further information as required by the Company will also be provided.
  • An undertaking from the applicant that LendingKart will be informed about the change in resident status if there is any.
  • An undertaking from the applicant that the loan will not be used for any speculative or anti-social purpose.
  • An authorisation has to be given to LendingKart for disclosing information regarding the Companies of the Group and the Directors, details regarding the loans obtained or to be obtained and regarding default if any, in meeting any obligations, to third parties as required at the discretion of LendingKart Group.
  • An authorisation has to be given to disclose all the information as mentioned above to CIBIL or other credit bureaus authorised by the Reserve Bank of India.
  • An authorisation to exchange information regarding the borrower's account with other financial institutions or banks as and when required in accordance with laws and regulations that are applicable.
  • An authorisation to LendingKart to pull out the required information from any authorised credit agencies regarding the Company and the Directors of the Company to assess the creditworthiness.
  • An authorisation to LendingKart to pull out returns pertaining to Goods and Services Tax (GST)/details of Companies or individuals on whose behalf the loan is being availed.
  • An authorisation to LendingKart to keep the borrower informed through SMS, telephone or email about their promotional activities or schemes.
  • LendingKart may charge of 10 for signature verification which is not refundable which has to be deposited to the specified bank at the particular account of LendingKart Finance Limited.

Eligibility for LendingKart Business Loan

The following are the eligibility criteria for LendingKart Business Loan:

  • The business has to be in existence for the last 6 months (3 months for Working Capital Loan) and should be well established.
  • The business should have a minimum turnover of 90,000 in the last 3 months prior to the date of the loan application.
  • The business should not be a part of the blacklisted/excluded list for SBA Finance
  • NGOs, Trusts, and charitable institutions are not eligible for the Small Business Loan or Small Business Working Capital Loan.
  • The location of the business should not be in the negative location list

Documents Required for LendingKart Business Loan

The following list of documents is required for LendingKart Business Loan:

  • Bank statements for the last 12 months: To be submitted by Proprietorship, Partnership, Private Limited, LLC, and One Person Company.
  • Business Registration proof like GST Filing/ Trade License/ Drug License/ TIN/ VAT Registration/ Gumastadara/ Business Registration Certificate: To be submitted by Proprietorship, Partnership, Private Limited, LLC, and One Person Company.
  • Copy of Company's PAN Card: To be submitted by Private Limited, LLC, and One Person Company.
  • Copy of Proprietor's PAN Card: To be submitted by Proprietorship, Partnership, Private Limited, LLC, and One Person Company.
  • Copy of Partnership Deed: To be provided by the Partnership firm
  • Copy of Proprietor's Aadhaar Card: To be submitted by Proprietorship, Partnership, Private Limited, LLC, and One Person Company.

How to Apply for LendingKart Business Loan?

To apply for LendingKart Business Loan, follow the steps mentioned below:

  • Check Eligibility: Firstly, check your eligibility for LendingKart Business Loan
  • Submit Application: Complete the application form, which 100% online. Enter your personal, business, and financial details to receive an MSME/ SME Loan offer.
  • Upload Documents: Next, upload digital copies of the required documents for verification in a single-step process.
  • Get Sanctioned: You will receive approval and disbursal of your MSME/ SME Loan within 3 working days. The application will then be evaluated to propose a fair sanction.
  • Receive Funds: After approval, you will receive your loan under 3 days. Use it to grow your business.

Formula to Calculate EMI

Equated Monthly Instalment (EMI) consists of both principal and interest components. Business Loans that can be paid off in EMIs are most convenient for business owners. They can plan their commitments if the loan has to be repaid in EMI as it will be a constant amount month after month. To check the loan eligibility, it is essential to calculate the EMI before applying for the loan to decide the loan amount and tenure that is convenient for you.

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:

  • Asses various finance options other than the loan before availing a Business Loan. A Business Loan may not be the only option to source your fund requirement to run the business. You can exercise various options like improving sales, cutting on operation costs and using the funds lying in the contingency funds.
  • 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 LendingKart will enable you to get funding for the next project immediately on clearing the loan availed for the present project.
  • Plan a strategy for the business growth by involving operational heads, business advisors and financial planners of the Company before going in for a Business Loan. If the loan is availed and it is not utilised in the direction which would yield a business growth then it is not worth it.

LendingKart Business Loan - Interest Rates, Processing Fees and Other Charges

LendingKart Business Loans involve the following charges:

  • Interest rate: 15% to 27%
  • A one-time processing fee: 1% to 2% of the loan amount
  • 10 as signature verification charges will be collected which has to be directly deposited to the specified LendingKart Finance Limited Account.
  • No pre-closure charges will be collected. Only the interest of the current month in which the loan is foreclosed, will be charged. Pre-closure allowed on full payment of the first EMI.

LendingKart Finance Limited - Customer Care Numbers

You can contact the Customer Care Support on the following numbers:

  • 1800-200-2300
  • 1800-102-7588
  • 0124-3864889
  • 011-42524110
  • 011-49518800

Frequently Asked Questions

Are there any special offers for Women Entrepreneurs at LendingKart?

No, there are no special offers for Women Entrepreneurs at LendingKart.

What is the procedure to hasten the loan processing at LendingKart?

As it is the loan processing time is very minimal at LendingKart. To hasten it further you will have to download the correct documents and give accurate information that is called for.

Is bi-weekly EMI payment advantageous?

Bi-weekly EMI will enable you to pay the loan faster. A loan availed for a working capital requirement can be replenished faster so that funds are available for further use.

Will the loan be provided even when the credit score is low?

The loan will be provided even when the credit score is low but the interest rate will be high. This will increase the cost of the loan which is not good for the business. So, it is better to aim at keeping the credit score high.

Is there any minimum turnover requirement to be eligible for a Business Loan at LendingKart?

Yes, minimum turnover of over 90,000 three months prior to the date of loan application is required to be eligible for a Business Loan at LendingKart.

What is the time taken for credit evaluation at LendingKart?

At LendingKart, they have devised a technical tool to assess the creditworthiness of the borrower which eradicates manual intervention to a large extent. So, the evaluation will be done as quickly as 3 days.

What are the methods to make payment to the loan account?

Payment can be done through NACH or by any other stipulated modes wherein the bank account will be debited automatically on the due dates.

What is the basis to determine the sanctioned limit?

Sales/revenue are the determinants for the sanctioned limit. With an increase in sales/revenue, the limit also can be enhanced.

Why choose LendingKart for a Business Loan?

LendingKart is the best choice because the loan evaluation is done quickly and there is no elaborate paperwork involved.

Are there any charges for renewal?

There are no charges for renewal. Only one-time processing charges will be collected at the time of availing the loan.

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