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BUSINESS LOAN

About Business Loan:

If you are planning to apply for a business loan and want to know the complete details for a business loan can see all the relevant details in the article below. Here we are going to provide you the details about the Business Loans. A business loan is nothing but a loan taken from the banks to invest on something on which you want to set up your business. You can borrow money from the bank for your small business and can repay them with some amount monthly with a fixed interest rate.

A loan which is particularly applied for the business purpose is Business loan. The customer has to repay this amount with interest to the taken amount with the decided interest rates. The applicants who are taking the business loans to own your small business, they also have to think about their personal credit scores. As the personal credit scores will also impact by taking these Business loans. If the applicants are using their personal credit cards to invest in their business then debt taken for business also affects personal credits. Before applying for the business loan know the required eligibility to avail a business loan. The following uses of business loan are :

  •  To purchase land or space for business operations

  •  To purchase equipment, machinery and raw materials

  • To pay rent, salaries, hire employees, staff training etc.

  •   For office renovatio

  •   For business growth or relocation

Benefits of Business Loan:

1. Flexibility of loan tenure

2. Easy repayment option by way of simple EMIs.

3. Higher tenure to suit your capital expenditure requirements

4. Higher loan eligibility

5. No collateral or security needed

6. Required minimal documentation

7. Competitive interest rate

Interest rate, fees and charges of Business Loan :

TYPE

CHARGES

Interest rate

10% to 12%

Loan Amount

Rs.50000 to Rs 50 lakh

Tenure Period

1 years to 10 years

Processing Fee

Upto 2.50% of the loan amount

Prepayment Charges

No pre payment permitted until repayment of 6 EMIs

After 7 EMIs : Upto 4% on the balance

Late payment of EMI Charges

Upto 3% p.a. on EMI/ Principal overdue

Eligibility Criteria to apply for the Business Loan:

Anyone can get a business loan with or without security. This only depends on the bank's rules which are offering you a loan amount and along with the risk on the amount they are ready to take. Everything matters when you are applying for a business loan like you are taking a loan to start a new business or you are applying it for extending the running business. This makes differences in surety. You will get your loan amount very soon if you meet all the required eligibility criteria once the documentation is done.

ELIGIBLE

Self employed individuals, Proprietors, Private ltd. Company and partnership firms

AGE

21 years to 65 years

TURNOVER

More than Rs.25 crore

EXPERIENCE

Total experience is 5 years

Individual who have been in the current business for a minimum 3 years

Documents required for Business Loan:

Any applicant who is going to avail a business loan must have to submit the following documents. These documents are the requirements for the lenders who are providing you the amount of loan.

1. Signed Application Form : The applicants should submit the complete filled in application form provided to them by the lenders along with one passport sized photograph.

2. Identity Proof : To submit this identity proof, you can submit any one of the following like PAN Card/ Passport/ Voter Id card/ Driving License/ Aadhar card.

3. Residential Address Proof : For address proof you can submit any of the following as Ration card/ Telephone bill/ Electricity Bill/ Passport/ Sales tax certificate/ Lease agreement/ Trade License

4. Certificate and Proof of Business : Existence.Along with the above documents these are also the mandatory certificates to be submitted such as true copy of the certified articles of Association and memorandum, sole proprietorship declaration. Audited financials of the last three years.

5. Age proof : Voter Id/ PAN Card. Passport any one can be submitted for the proof of age.

6. Income Proof : Last 3 years ITR (income tax returns) (self and business), profit and loss account, balance sheets certified/audited by a CA. Last 12 months bank account statement (self and business)

  • Self Employed applicants who are non-professionals : Profit and loss balance sheets for the last two years need to be given which should be audited by the CA (chartered Accountant). Bank statements and It return copies of the last two years.

  • Professional & Self Employed individuals : Bank statements of the last six months and It return copies of the last two years. Balance sheets audited by the CA of profit and Loss.

  • Private Ltd. Co. & Partnership Self Employed : IT returns copies of the last two years and Bank statements of the last six month. P and L balance sheets audited by the CA.

How to apply for Small Business loans:

1.    Determine why you need this loan

2.    Determine which type of loan do you need

3.    Determine your borrowing options

4.    Evaluate your credit score and credit history

5.    Gather your documents and apply for a loan

Compare other banks business loan interest rate : 

 

BANKS 

INTEREST RATE

HDFC Bank Business Loan

15.65% to 21.20%

Yes Bank Business Loan

16.25% to 19.99%

Citi Bank Business Loan

12% to 16%

RBL Bank Business Loan

10.65% to 16.25%

Indian Bank Business Loan

8.30%

How to calculate EMI of Business loan :

Business loan EMIs are calculated using a very easy formula.

E = P x r x (1+r)n / (1+r) n-1 

Where,

E = EMI amount

P = Principal amount

r = Rate of interest at which you will be borrowing the loan

n = tenure of the loan over which you will be repaying the loan.

Financials products offered by banks :

BUSINESS LOAN

CAR LOAN

COMMERCIAL LOAN

EDUCATION LOAN

GOLD LOAN

HOLIDAY LOAN

HOME LOAN

LOAN AGAINST PROPERTIES 

LOAN AGAINST SECURITIES

PERSONAL LOAN

PROFESSIONAL LOAN

TWO WHEELER LOAN

 Business Loan Frequently Asked Questions :

1. How much processing fee is charged by business loan?

The processing fee charged by business loans is upto 2.50% of the loan amount.

2. What is the minimum and maximum tenure period of business loan?

The minimum tenure period is 1 year and maximum tenure is 10 years.

3. How much loan amount is charged by business loan?

The loan amount charged by business loan is minimum Rs.50000 to Maximum Rs.50 lakh

4. How much interest rate charges are applied by business loan?

Interest rate charges are applied by business loan is 10% to 12%

5. What is the maximum age required for a business loan?

The maximum age is required for business loan is 75 years 

 

Last Updated on : 10/Aug/2020

Know More About

Business Loans

You're eligible for a Business Loans if you:


Are legally adult enough to handle it


Have still got it


Get a regular pay check


Make more than a basic buck

Your eligibility depends on:


Earn more than minimum income required


Maximum allowed Business Loans is Rs. 10K to Rs. 45 lakhs


EMIs of other loans loweryour eligibility

Boost your eligibility by:


Pay off your credit card bills


Choose longer tenure loan up to 5 years

Nothing gets done without that paperwork (which we'll happily carry over to the bank for you, no sweat). Here's what you'll need:

  • 1. Photo ID and age proof
  • 2. Signed application form with photograph
  • 3. Residence proof
  • 4. Last 6 months bank statement
  • 5. Documentation for salaried applicants:
    • Last 3 months salary - slips
    • Form 16 or Income Tax Returns
  • 6. Documentation for self-employed applicants:
    • Last 3 years Income Tax Returns with computation of Income
    • Last 3 years CA Certified / Audited Balance Sheet and Profit & Loss Account

Business Loans Interest Rates

Updated on 25 Nov 2017

Business Loans Details
Interest Rate (Monthly reducing balance) 15.65% - 21.2%
Processing Fees Varies with bank
Loan Tenure 1 year to 5 years
Pre-closure Charges Varies with bank
Guarantor Requirement Varies with bank

Business Loans EMI Calculator

Loan Amount

|
1L
|
50L
|
100L
|
150L
|
2Cr

Interest Rate

%
|
5
|
10
|
12.5
|
17.5

Loan Tenure

|
1
|
10
|
20
|
25
|
0
|
120
|
240
|
300


Your Monthly Loan EMI


₹24,959