Business require an adequate amount of capital to run day to day expenses or pay for expansions. Business loan can be availed for an existing business to manage the immediate short term capital or cash flow requirement. A business loan is a loan given to an Individual or company which is repaid by way to easy installments according to the lenders terms and conditions.
A business loan comes under the category of unsecured loan, The major benefit of business loans in India is that it does not require any collateral or security to avail the loan and most of the banks sanction business loans with minimal pre-payment charges.
The business loan depends on the annual profit of a business and number of years you are into that business. It also checks the cash flow and other aspects of revenue generation. Once the bank considers all the major factors, it decides the eligibility of loan amount which a business can get.
Under business loans getting an approval is possible within few days if an individual or the company meets the necessary eligibility criteriaa along with the documents.With a strong banking system and network of lending through Banks and Non-Banking Financial Companies (NBFCs), it has become a very easy process to avail a Business Loan. Contact us now to apply for a business loan…
The business loan can be offered to an individual who is running an authorized business with a decent earning can apply for a business loan. Different banks have different criteria and terms to validate the authenticity of his/her business. After complete verification, banks have the sole authority to decide the loan amount and even whether to offer or decline the loan to the borrower .
Below are some points which are generally considered before offering a loan
FACTORS DECIDING BUSINESS LOAN ELIGIBILITY
The business loan eligibility depends on the annual profit and the turnovers of a business also number of years you are into that business is a key factor. Banks also checks the cash flow and other aspects of revenue generation. Once the bank considers all the major factors, it decides the eligibility of loan amount which a business can get. The main criteria of approving a business loan is how much profit a business makes and how the borrower will manage to repay the EMIs and other expenses related to the business.
Few important factors are:
Customer Profiles that Banks Consider for Business Loans
The customer who are no salaried and run their own business are considered for business loan. The category consists of Self employed professionals(SEP), self employed non professionals(SENP) and the business entities/companies. The type of customer category who can avail business loan are as under.
Self Employed Professionals (SEP) / Professional Practitioners are usually
Self-Employed Non-Professionals (SENP)/ Non Professional Practitioners
The eligibility criteria, documentation requirement, interest rate; loan tenure differs as per their category.
Certain set of documents are required as the Banks/ NBFC follow a specific procedure while processing loan applications. Therefore, even for the consideration for a bank loan, the Entrepreneur must compile and submit the Bank a strong documentation. The following are some of the documents required for processing of a business loan application:
The above list is indicative only. The Banker at his/her discretion might request for more or detailed information based on the credit profile of the bank. Further, submission of the above documents does not guarantee the sanction of the loan. The above documents must be submitted to the bank and the credit opinion would still be considered by the Banker based on a various of factors.
Taking a loan allows you to borrow money for almost all your requirements and to have a better experience, there are certain points you must know before availing a personal loan.
All © Copyright Mudra Home Inc. All Rights Reserved.