Types Of Business Loans

.

These are a few of the most popular business loans that Indian company owners can apply for.

• Term Business Loans:

 These are simple, short-term loans with no extra advantages. These loans have a brief term span of one to five years. The borrower must specify the purpose of these loans, and the approved amount is determined by the credit history of the business.

• Loans for Working Capital:

Working capital business loans have a duration of one to five years, just like term loans. Nonetheless, company owners use these loans to pay for immediate, short-term obligations like rent or employee salaries, as well as upcoming or daily costs.

• Loans for Commercial Businesses:

High turnover businesses can have their capital needs met by commercial business loans. These loans have a three to five-year term and provide immediate capital up to Rs 50 lakh. The loan is only available to profitable businesses that have been operating for a minimum of a year.

• Startup Loans: 

Since startups are now very common in India, lenders provide startup loans to business owners who wish to grow current businesses. These loans give aspiring business owners flexibility in repayment terms and don't require the promise of any valuable assets as collateral.

• Financing for Equipment:

 This type of business loan enables entrepreneurs to obtain quick cash to purchase cutting-edge machinery or other equipment. But, business owners may also utilize the loan to cover other costs.

Eligibility Criteria For Business Loans

The following requirements must be met in order to be eligible for the business loan details.

1. Well-established businesses that have been in operation for longer than six months at the application time

2. A minimum of Rs 90,000 in revenue during the three months following the application date

3. The company is not included in any list or category of excluded or blacklisted companies.

4. The business or office location is not listed as a negative location.

5. Trusts, NGOs, and charitable organizations are not qualified for business loans.

Documents Required For Business Loan

The following paperwork must be submitted in order for proprietorships, partnerships, and Pvt. Ltd./LLP/one-person companies to finish their business loan application:

1. KYC documents: Proof of address and identity for the borrower and each co-borrower

2. The borrower's and each co-borrower's PAN card

3. The primary operating business account's bank statement for the previous six to twelve months

4. A signed copy of the loan facility's standard terms

5. Extra document or documents for processing loan requests and credit evaluation

6. GST Enrollment

7. Bank statements for the previous 12 months

8. Documentation of company registration

9. A copy of the proprietor's PAN and Aadhar cards

10. In the event of a partnership, copies of the deed and the company PAN card

Also Read - Business Loans: What are they & How do they work?

How To Apply For Business Loans

This is how to apply to a reputable lender for a business loan:

Step 1: Go to the business loan section of the lender's website.

Step 2: Fill out the application by clicking "Apply Now."

Step 3: Send in all necessary paperwork to finish the KYC process.

Step 4: To finish the loan application process, click the "Submit" button.

Step 5: Following review, the lender will grant the loan in less than 30 minutes and deposit the funds into the borrower's bank account 48 hours later.