Apply Business Loan Online up to Rs. 50 Lakhs
Find the best quotes for collateral free business loan online from multiple lenders with flexible repayment options.
What is a Business loan?
Business loans are the type of loans designed to cater to the needs of small businesses or enterprises. It can be helpful to meet your capital requirements and for expansion purposes.
Several banks and financial institutions offer customized business loans at attractive interest rates to people involved in the business. Usually, people applying for business loans need not provide any collateral or security.
Features of a Business loan
Things to Know before applying for a Business Loan
Borrow what you need
Generally, the quantum of the loan amount in a business loan is high. However, it does not mean you need not assess your requirements to know how much exactly you need. It is best advised not to borrow more than what you can afford. Repayment during such instances may be a big problem.
Understand the business loan types
Most banks and NBFCs offer multiple types of loans as a part of their offerings. Not every loan will suit everyone. Some loans are aimed at a specific section of society with benefits such as lower interest rates. Hence, understand the different types of loans and choose the one which fits your requirement.
While banks do check your credit score as a part of their verification process, it’s better to have an idea about it yourself. Usually, the lenders sanction business loans to people with a credit score of more than 750. Before applying for business loans, ensure your credit score is 750. If not, take steps to improve your credit score.
Charges that are levied on business loans include interest rate, processing fee, default fee, document fee, foreclosure charges, etc. The charges vary from lender to lender. Make sure you have an idea about all the charges, and be wary about the impact they could make on your income.
Lenders usually consider your repayment capacity before sanctioning the loans. As someone who avails the loan, you must understand the repayment terms of the lender thoroughly. Plan your monthly budget in a way that you do not default on your EMIs.
Business Loan Types
2.Private limited company
3.Companies on partnership
Eligibility to avail Business loan
Business loans can be availed by self-employed, manufacturing and services companies, and private limited companies. Each lender has a specific set of eligibility criteria that the applicant must fulfil for successful sanctioning. Some standard eligibility criteria for business loans are:
- Age limit – (21 to 65) years old
- The applicant must have not any criminal background
- Applicant should have a good credit score and must not have defaulted on previous loans
- Income Tax Returns for the past three years
- Charges and Fees, turnovers, operational history differs from lender to lender.
Documents required for Business loan application
- ID Proof – PAN Card, Aadhar Card, Voter ID, and Passport
- Address Proof – Ration Card, Aadhar Card, Voter ID
- Recent Passport Size Photographs
- Business address proof
- Bank Account statement for the past six months
- IT returns for the past three years
- Proof of ownership of the possessions used to carry out business activities
- Balance sheet, profit and loss accounts
- GST, Registration certificate
- Sales tax certificate
- Self Employed professionals like Doctors, CAs, Architects
- Sole Proprietors
- Partnership firms
- Companies involved in Manufacturing and services company
- Private limited companies
- Artisans and Retailers
Why apply for a Business Loan?
How to apply for Business Loan?
- Login to Fincover and fill in details like your mobile number, loan amount required, city or residence, annual turnover and profits.
- Submit the form. You will get offers from different banks and NBFCs based on your eligibility.
- Compare and select the offer which suits you the most and apply for it.
- Once you provide all the documents required to process the loan, the bank will verify your eligibility and decide whether to approve or reject your business loan.
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