Business Loan

Business Loan Interest Rates from Top Banks/NBFCs - March 2023

Documents Required to Apply for Business Loan for individual

• Personal Identification

  Valid government-issued identification such as a passport, driver's license, or national ID card.

• Business Registration

  The business must be registered with the appropriate government agency. This could include a copy of the Certificate of Incorporation.

• Financial Statements

  Most lenders will require the last two years of financial statements, including balance sheets, income statements, and cash flow statements.

• Bank Statements

  Lenders will want to see at least two to three months of recent bank statements for both the business and the loan applicant.

• Business Plan

  A business plan outlining the purpose of the loan and how it will be used to help the business grow.

• Collateral

  Depending on the lender, collateral such as real estate, equipment, or inventory may be required to secure the loan.

• Tax Returns

  Lenders will want to see the last two years of tax returns for the business and the loan applicant.

Fees and Charge for Business Loan

The fees and charges associated with business loans vary depending on the lender, the loan amount, and the type of loan. Generally, some of the common fees associated with business loans are origination fees, closing costs, late payment fees, prepayment fees, and loan servicing fees. Additionally, some lenders may also charge additional fees for certain services.

How to apply business loan online

• Collect all necessary documents

  Before you apply for a business loan online, make sure to have all the necessary documents ready. You will need to provide documentation such as:
  
  • Bank statements
  • Tax returns
  • Credit history
  • Business plan
  • Proof of ownership
  

• Search for lenders

  Once you have all the necessary documents, you should start searching for lenders that offer online business loans. Look for lenders that offer competitive rates and flexible repayment terms.

• Submit your application

  Once you have found a lender, you can submit your application through their website. You will need to provide your personal information, business information, financial information, and any other documents required by the lender.

• Wait for approval

  After you submit your application, the lender will review it and decide whether to approve or deny your loan application. This process can take anywhere from a few days to a few weeks.

• Receive funds

  If your loan is approved, the lender will deposit the funds into your bank account. You can then use the funds to cover your business expenses.

Types of Business Loans in India

• Term Loans

  Term loans are the most common type of business loans in India, typically offered by banks and NBFCs. They are long-term loans that are repaid over a pre-determined period of time with regular payments.

• Working Capital Loans

  Working capital loans are short-term loans that are used to finance the day-to-day operations of a business. They are typically used to cover short-term expenses such as payroll, inventory, and other operational costs.

• Line of Credit

  A line of credit is a type of loan that allows a business to borrow up to a pre-determined limit and repay only the amount it has used. This type of loan is particularly useful for businesses with fluctuating cash flows.

• Merchant Cash Advance

  Merchant cash advances are loans provided by specialised lenders to businesses in exchange for a percentage of their future credit card revenues. This type of loan is often used by businesses that do not qualify for traditional bank loans.

• Equipment Financing

  Equipment financing is a type of loan used to purchase equipment or machinery required for the business. This loan is typically secured against the equipment being purchased and can be used for both new and used equipment.

• Invoice Financing

  Invoice financing is a type of loan used to finance unpaid invoices. The lender pays the business upfront for the invoices and collects the payments from the customers. This type of loan is particularly useful for businesses that need short-term working capital.

10 FAQs About Business Loan

• 1. What is a business loan?

  A business loan is a type of financing that is used to help businesses cover expenses related to operations, expansion, or other investments. Business loans are typically provided by lenders, such as banks, credit unions, or alternative lenders.

• 2. What are the different types of business loans?

  The most common types of business loans are term loans, lines of credit, merchant cash advances, invoice factoring, and SBA loans.

• 3. What are the requirements for a business loan?

  Requirements for a business loan vary from lender to lender. Generally, most lenders will require a business to have been in operation for at least one year, have a certain amount of annual revenue, and have a good credit score.

• 4. How long does it take to get approved for a business loan?

  The approval process for a business loan can vary depending on the lender, but generally it can take anywhere from a few days to a few weeks.

• 5. How much money can I get with a business loan?

  The amount of money you can get with a business loan will depend on the lender and the type of loan you’re applying for. Generally, most lenders will offer loans of up to $1 million.

• 6. What are the repayment terms for a business loan?

  Repayment terms for a business loan vary from lender to lender. Generally, most lenders will offer repayment terms ranging from six months to five years.

• 7. What are the interest rates for a business loan?

  Interest rates for business loans can vary depending on the lender and the type of loan you’re applying for. Generally, most lenders will offer interest rates ranging from 4% to 25%.

• 8. Are there any fees associated with business loans?

  Yes, there are usually fees associated with business loans. These fees can include origination fees, application fees, closing costs, and other fees.

• 9. Do I need collateral for a business loan?

  It depends on the lender. Some lenders may require collateral, such as equipment or real estate, while others may not.

• 10. How can I apply for a business loan?

  You can apply for a business loan online or in person at a bank or other lender.