Business Loan

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Business Loans / Corporate Loans

Business Loans are the Unsecured Loans offered by banks and financial institutions without any Collateral Security. A business loan is a loan taken out by a business to pay for business expenses such as equipment purchases, to cover operating expenses, or to expand into new markets.

Mostly these Business Loans are sanctioned based on the Creditworthiness of the Entreprenuer and the Business by looking at the CIBIL Score.

Bank grant business loans ranging from Rs.50,000 to Rs 75 Lakhs based on the documents provided and the tenure may vary from 1 to 3 years. To process these loan applications, it will take 7 working days once the documentation is completed.

Business loans are frequently used for:

  • Startup costs
  • Commercial real estate purchases and/or remodeling
  • Cash flow for everyday expenses
  • Debt consolidation or refinancing
  • Equipment/Inventory purchases
  • Business acquisitions/expansion/franchising
  • Marketing and advertising
  • Refinancing

  • Term loans: These are the simplest type of business loan, where you will receive a lump sum and pay it back over a number of years.
  • Small Business Administration loans (SBA): These are loans from the SBA that generally have low rates and long repayment periods.
  • Working capital loans: These loans are used to pay for operating expenses to keep businesses solvent.
  • Equipment loans: These loans are used to purchase specific equipment that a business needs to operate.

KYC Documents:

  • PAN Card
  • Aadhaar Card
  • Passport size photos-3 copies

Other Documents:

  • Last 3 years IT returns
  • Finacial Statements
  • All bank statements of 1 year from till date(Current & Savings)
  • Udyog Aadhar, GST certificate
  • Light bill of business/Rent Agreement(If Rented)

  • Age of Business: Most lenders prefer businesses that have been operating for at least 1-3 years. Startups might face stricter criteria.
  • Type of Business: Some sectors may be deemed higher risk. Lenders often have preferences based on industry stability and profitability.
  • Personal Credit Score: For small business loans, lenders often look at the personal credit score of the business owner. A CIBIL score of 650 or higher is generally preferred.
    Business Credit Score: Established businesses should have a good business credit score. A score of 750 or above is generally considered favorable.
  • Revenue and Profitability: Lenders assess whether the business generates sufficient revenue and profit to cover loan repayments. Minimum annual revenue requirements vary but often start around ?10 lakh.
    Cash Flow: Consistent and positive cash flow is crucial. Lenders will review bank statements and cash flow projections.
  • Business Plan and Debt-to-Income Ratio: A detailed business plan showcasing the business model, market analysis, revenue projections, and how the loan will be utilized can strengthen the loan application. Also the Debt to Income ratio helps lenders determine how much of the business income goes toward paying debts. A lower ratio indicates better loan eligibility.
 
     
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