Concepts In Business Loan
What is a Business Loan?
Business loans are a form of financing that can be obtained from banks or other financial institutions for the purpose of starting, buying, expanding, or running a business. There are many different types of business loans available to suit your needs. For example, term loans and lines of credit are both options for businesses looking to borrow money. The benefits of business loans include lower interest rates and the ability to borrow more money than you would with a personal loan.
Features & Benefits of a Business Loan
- No Collateral/Security Required
- Loan Amount up to 50 lakhs
- Flexible End Use
- Flexible Part/Pre payment Options
- Minimal Documentation
- Easy Approval
- Quick Disbursal
Business Loan EMI Calculator
Types Of Business Loan
The working capital loan is a type of financing that is designed to help businesses meet their short-term cash needs. A working capital loan can be used for a variety of reasons, such as: To finance the purchase of inventory or raw materials to meet production schedules and increase productivity, For general business operations, To help cover operating expenses, To fund marketing initiatives, To finance the purchase of equipment or machinery
A term loan is a financial product that is used by businesses to cover their short/long-term funding needs. Term loans are short/long-term loans that are provided for periods of up to five years, with maturity dates set at the beginning of the loan term. They typically have an interest rate that is fixed during the entire repayment period and do not need to be repaid until the end of the financing period, at which time they must be repaid in full.
Bill discounting loan is a form of lending in which a company borrows money from a lender and agrees to repay the loan at a later date. The agreement specifies an interest rate for the loan. The company uses the money to pay its suppliers, employees, and other bills. It also pays interest to the lender until it repays the loan.
An overdraft is when you have spent more money than you have in your account, which means that you have gone over your limit. If this happens, the bank will lend you the difference between what you owe and what is in your account. This type of loan usually has a high interest rate and carries many fees associated with it. An overdraft can be used for emergencies such as car repairs or medical bills if they are not covered by insurance. The borrower must repay the amount borrowed plus any fees and interest within a certain period of time which varies depending on the lender’s policies and regulations.
A machinery loan is a type of business equipment financing that helps businesses purchase expensive equipment or new technology. The process of a machinery loan starts with a request for an estimate from the lender, which will then be sent to the borrower for consideration. If approved, the borrower will sign an agreement and provide collateral, which can be in the form of real estate or other assets. In addition, they may also have to pay closing costs and fees associated with the loan. A machinery loan can help businesses grow by providing them with funds they need for their growth plans.
Loan on GST/Turnover is based on company’s turnover and monthly GST returns. Borrows checks companies cash transactions, account transaction and monthly/quarterly/yearly GST returns and approves the loan amount and give lower interest rates. Compare to other business type of loan, it is easy to get loan and benefits.
Eligibility criteria for Business Loan
- Age Limit- Minimum 21 years to Maximum 58 years
- Work status – Self Employee
- Business Experience – Minimum 2 year
- Income- Minimum net Profit Rs. 35,000/- and above, based on ITR.
- CIBIL Score- Minimum 650 and above
The above-mentioned Business loan eligibility criteria are indicative in nature. Lenders have the discretion to relax or make the documents for a Business loan more stringent from one applicant to another.
Documents/Check list for Business Loan:
- Adhar , Voter ID, Driving Licence, passport
- Pan
- Passport size photo
- Latest 3 years ITRs of company and partners/directors
- Company pan(pvt ltd/partnership)
- Minimum 2 yrs of business proof
- Latest 12 months bank statement
- Present address proof(adhar, voter id, driving licence, passport, HR letter, gas bill, rental agreement on Rs. 100 bond paper, postpaid bill).
- Business address proof(GST/Rental agreement/Labour licence/any govt register document)
- Own house proof(power bill/property tax/sale deed/water bill/any govt document)
- Additional Documents: Balance transfer documents(latest 3 months credit card statements/loan account statements)-These additional documents are not for all, for required customers only.
The above-mentioned Business loan documents are indicative in nature. Lenders have the discretion to relax or make the eligibility criteria for a personal loan more stringent from one applicant to another
Interest Rates For Business Loan
| Bank Name | Interest Rate (Onwards) |
Processing Fee | Max Loan Amount | Loan Tenure (Months) |
| HDFC Bank Ltd | 15% | 1.00% | 50 lakh | 12 — 48 |
| IDFC First Bank | 15% | 1.50% | 75 lakh | 12 — 48 |
| ICICI Bank | 15% | 1.50% | 40 lakh | 12 — 48 |
| Axis Bank Ltd | 15% | 1.50% | 40 lakh | 12 — 36 |
| Kotak Mahindra Bank Ltd | 15% | 2.00% | 50 lakh | 12 — 48 |
| Standard Chartered Bank | 16% | 2.00% | 75 lakh | 12 — 48 |
| Yes Bank | 16% | 2.00% | 50 lakh | 12 — 36 |
| Bajaj Finance Ltd | 17% | 2.00% | 45 lakh | 12 — 60 |
| Fedfina | 17% | 2.00% | 30 lakh | 12 — 36 |
| Fullerton | 17% | 2.00% | 50 lakh | 12 — 36 |
| Poonawala | 18% | 2.00% | 50 lakh | 12 — 36 |
| Tata capital | 18% | 2.00% | 50 lakh | 12 — 36 |
| Aditya Birla Finance Ltd | 18% | 2.00% | 30 lakh | 12 — 36 |
| Hero Fincorp | 18% | 3.00% | 25 lakh | 12 — 36 |
| Loan Frame | 18% | 2.00% | 25 lakh | 12 — 36 |
| IndusInd Bank | 18% | 2.00% | 50 lakh | 12 — 36 |
| UGRO | 18% | 2.00% | 25 lakh | 12 — 36 |
| Edelweiss | 18% | 2.00% | 75 lakh | 12 — 36 |
| Axis Finance | 18% | 2.00% | 30 lakh | 12 — 36 |
| SMC Finance | 19% | 2.00% | 30 lakh | 12 — 36 |
| Lendingkart | 19% | 2.50% | 75 lakh | 12 — 36 |
| Indifi | 20% | 3.00% | 50 lakh | 12 — 36 |
| Dhanvarsha Finvest Limited | 21% | 2.00% | 30 lakh | 12 — 36 |
| Loantap | 21% | 2.00% | 15 lakh | 12 — 36 |
| Neogrowth | 24% | 3.00% | 75 lakh | 12 — 36 |
| Growthsource | 24% | 2.00% | 25 lakh | 12 — 36 |
The above-mentioned Business loan rate of interests is indicative in nature. These are all last month interest rates this month might be varies.