Business Loan

There are several types of loans for business that are provided by banks and NBFCs today. Some of the popular types of business loans are mentioned below:

Types of Loans for BusinessDetails
1. Unsecured Business LoanYou can avail high loan amount up to Rs. 1 crore under this scheme. No security is to be kept with bank.
This loan is for businesses that have at least 3 years vintage.
The company has to meet the eligibility requirement set by the bank/NBFC in regards to annual turnover to qualify for the loan.
2. Secured Business LoanIn a secured loan, you have to provide an asset to the bank/NBFC providing you funds. The loan amount will be based on the monetary value of the asset.
You can get up to 70% of the asset’s value as the loan amount.
Many business owners take a loan against securities, loan against property, and other assets to arrange finances for their company.
3. Working Capital LoanThis type of loan is for the purpose of funding day-to-day operations of a company.
The funds can be used to pay for regular business expenses to fuel the daily activities of the company.
Business owners use a working capital loan for sales/marketing campaigns, wages, manufacturing, adding resources, etc.
4. Equipment FinancingThis type of loan is taken to purchase equipment. Being a secured loan, the equipment itself serves as collateral.
You can get up to 90% or 100% finance as per the value of the equipment.
5. Line of CreditIt is a revolving line of credit. Here, as a borrower you can take an agreed amount as credit.
You can draw the amount whenever necessary. There is no necessity to withdraw the amount in lump-sum.
Also, you have to pay an interest on the only amount used, instead of the total approved amount.
6. Bill DiscountingThis scheme provides instant cash-back on bulk or large purchases by means of getting discount on credit sales
You have to submit important documents which justify the transactions, such as transportation receipts, invoice, lading bills etc.
7. Business Loan for WomenThere are special schemes for women who have exceptional entrepreneur skills.
To be eligible for loan on business, the female must be an owner of at least 50 percent of the company.
Such a loan can be provided at a discounted rate of interest.
8. Mudra Yojana Business LoanThe Mudra Yojana business loan was launched by the government of India for small and medium sized enterprises.
These loans carry special interest rates and are provided by almost every bank offering business loans.

Business Loan Eligibility Criteria

Eligibility CriteriaDetails
1. Who Can Apply?Self-employed individuals, professionals, service providers, manufacturers, private limited or limited company, etc.
2. Applicant’s AgeAt least 21 years old
3. Business VintageMinimum 3 years
4. Annual TurnoverOver Rs. 100 lakhs
5. Other RequirementsBusiness should be registered, ITR and balnce sheet should be audited  of the last 3 years, and other required documents

Dox Required for a Business Loan

If you want to apply for an unsecured business loan, then you have to provide KYC (PAN Card, Aadhaar Card) - of Business /Directors/Partners/Proprietor. Apart from these, you have to submit the following documents.

Required DocumentsDetails
1. PhotographAs a borrower, you must provide your recent passport-sized photographs
2. Proof of IdentityPAN card, Valid passport, Driving License, Aadhaar card, Voter’s ID card
3. Proof of AddressBusiness address proof, Utility bill, Latest (not older than 3 months) water bill/electricity bill/telephone bill/gas connection, Voter’s ID card, Passport, Aadhaar Card, Driving license
4. Proof of Business Vintage and OwnershipProof of business existence for last 3 years, Shop Act/Gumasta License (if applicable), and registration proof
5. GSTGST Certificate and GST Returns of last 4 quarters
6. Income Tax ReturnITR for 3 years with computation
7. Financial DocumentsCurrent/saving account bank statement for all current/saving accounts in PDF Format (latest 12 months)
Audited Financials for 2 years – Balance Sheet and P&L
Existing Loan Account statements/sanction letters.

Get Financing For Whatever You Need Now

All loans are not created equal, personal loan has become a great option for people to use.

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