How do you get a business loan in India?

A steady flow of cash is necessary for the growth and success of any business. Doesn’t matter if it is small or big, no business firm can survive without sufficient funds. The money that is raised in from the market or that is pooled in by the promoters of the business depends on the size of the business, its nature, and viability. Funds are much required especially during its growth stage. As the business matures the requirement for capital and working capital depreciates. 

Some people who have gold in the form of jewelry or coins takes a loan against gold to meet some of the requirements of funds in their business. Because this loan is secured the gold loan interest rates are quite low. However, not all requirements can be met using a gold loan all the time.

 Today several banks, NBFCs, and financial agencies provide business loans to business firms, operating on both large scale and small scale levels, at good interest rates. The support of these loans is necessary for most of the firms until they’ve made a mark in their respective fields. 

What Is A Business Loan?

A loan that is taken to meet the various financial requirements of the business including funds for capital, staffing, expanding the company’s operations, for buying the necessary machinery and other equipment, for hosting events and for the implementation of various projects.

A business loan is usually an unsecured loan and the company can borrow up to Rs. 1 crore depending on the policies of the respective bank/NBFC. In general, the loan tenures are flexible and interest rates are fixed.

How To Get A Business Loan In India? (Criteria For Eligibility)

Banks/NBFCs usually provide business loans to:

  • Working professionals including accountants, doctors, teachers, etc.
  • Private companies
  • Limited companies
  • Self-employed individuals
  • Manufactures and service providers

To apply for a business loan the individual or the organization that is applying for the same is required to meet certain criteria including the following:

  • Age of the applicant– The minimum age 21 years and the maximum age 65 years.
  • Your business must be registered
  • How long has the business been operating? To get a business loan the business must have been operating successfully at least 2-3 years.
  • Minimum Annual Turnover– Your business should have a minimum annual turnover of Rs. 1, 50,000.
  • Income Tax Returns– IT returns for the past 2-3 years is essential.
  • Good credit scores/CIBIL Scores.

How to apply for a business loan? 

To get a business loan you need to submit a duly filled and signed loan application form along with all the necessary supporting documents. A good credit score is essential to get a maximum loan amount with good interest rates. Once the loan application and supporting documents have been evaluated successfully the loan amount gets sanctioned and transferred to your bank account.

The documents required include:

  • A valid bank statement for 12 months
  • Proof of business registration and business vintage
  • Proof of ownership of the business firm
  • GST returns and GST certificates
  • Income Tax Returns for the last 2-3 years
  • 2 passport-sized photographs of the applicant
  • Audited financials for the past 2 years
  • Pan Card/Aadhar Card
  • Statements of any loans that exist currently

The criteria for eligibility, formalities and the application process varies depending on the particular bank/NBFC/financial agency.  Compare between the different banks and NBFCs that provide business loans along with their interest rates, eligibility criteria, and loan tenure. Choose one that satisfies the requirements of your business perfectly.

This blog is maintained by the Finaura team. Finaura is a solution that will help you find the best gold loan solution from gold loan company nearest to you. If you have any queries please feel free to contact us. Call us on +91 484 2388285 or email us at [email protected]

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