Features for a Business Loan
A Business loan is unsecured funding issued to self employed persons without any guarantee, solely for the purpose of meeting expenses for running their establishment and related Business needs.
Who is eligible to apply for a Business Loan?
All Indian citizens over the age of 25 years having a registered business are eligible to apply: the maximum age for repayment is of the loan is 70 years. The business vintage must be 5 years or more to be eligible for a loan with a profitable trend.
What is the amount issued as a Business loan?
Business loans are issued from ₹ 1 lakhs onwards up to ₹ 10 Crore depending on the requirement, turnover and volume of the business. The quantum of business loan depends on the valuation of the business, annual profits of the business, and the industry within which the business operates.
What is the tenure applied for a Business loan?
As a Business loan is an unsecured short term loan the repayment tenure for a Business loan is from 12 months to 36 months: for self employed professionals tenure of 48 months can be applied. The tenure is fixed as per the Loan amount and the repayment ability of the applicant.
What can you use your Business loan for?
A Business Loan is issued by Banks and NBFC’s specifically for the purpose of Business expenses and expansion: Loans may be applied towards;
The daily capital expenses required for running of the unit: funding the daily running of the business is necessary for the smooth management of the business. Funds via business loan can be used for managing daily business expenses.
For funding of new projects: all establishments need to innovate, diversify and expand in order to survive and grow. A Business loan is readily available to invest and enable the new projects in order to grow.
A Business loan is available for Purchase of New machinery and to upgrade the existing manufacturing: as maintenance of existing infrastructure is essential for production units. With purchase of latest equipment to keep pace with new trends
To invest in an ancillary unit for your expanding Business may, as when additional work opportunities come it will be necessary to add additional working space. Costs for the same can be funded easily via a Business loan.
Approved Segments for a Business Loan
Self employed segments where the business profile and portfolio are positive are the preferred sourcing criteria which include:
Small and medium size enterprises functioning as proprietorship firms or Limited or private limited firm: engaged in manufacturing of goods, distribution of raw materials, and affiliate industries.
The growth in the services industry has been unprecedented Professional Services that are offered Loans for their business under this category are IT/ITES, Hotels and Restaurants, Hospitals and Clinics, Education, Automobiles, Tours & Travels.
Self employed professionals such as Doctors, Chartered accountants, I T professionals or Interior decorators who work individually or have companies or firms.
Wholesalers Traders and Retailers
Wholesalers are also stockists who ware house and distribute goods to traders and retailers. Goods are further sold in the in the open market, funds as a business loan to are forwarded to such individuals and companies to maintain the chain.