India is a growing market with a lot of business opportunities for young entrepreneurs. In recent years, a large number of young individuals have come up with innovative ideas to establish their own startup. This has resulted in the establishment of a large number of small and medium scale enterprises across the country. Keeping all these factors in mind, the Government of India has launched various schemes to promote the growth and expansion of small businesses in India. The Credit Guarantee Scheme and MUDRA loan scheme are some great initiatives taken by the Government of India to provide financial support to small businesses. In addition to these schemes, entrepreneurs can also make the most of small business loans to arrange capital for their business. Let us have a look at some of the major aspects related to business loans in India
Eligibility criteria for business loans:
- You must be a citizen of India.
- You must be a self-employed individual.
- Self-employed individuals between 26 – 66 years are eligible and can apply for a Business Loan.
- You must have atleast 3 years of business vintage.
Steps to apply for a business loan
With the help of reputed financial institutions, you can easily apply for a business loan from the comfort of your home through a hassle-free online application process. The steps to apply for a business loan are mentioned below:
- Fill in the online application form consisting of your personal and financial details
- Select the loan amount and the loan term you want for yourself
- Upload the required documents.
- Post-approval and verification of your documents, you will receive the amount in your bank account within 24 hours.
Apart from a hassle-free online application process, you can also access the details of your business loan through an online portal. You can easily monitor your balance, the amount of interest you have to pay on the principal, and your remaining loan tenure.
Since business loans are usually secured loans, you must make sure that you have a good credit score before applying for a business loan. This will reflect your good repayment capacity, thereby increasing the chances of your business loan approval. Moreover, good credit history can help you avail a higher loan amount at a reduced rate of interest.
In addition to that, while evaluating your business loan application, financial institutions will also have a look at your business experience, business plan, etc. before making a lending decision. It is advisable to carry out adequate research while applying for a business loan. Nowadays, with the help of various online portals, you can easily compare the interest rates, processing fees, the flexibility of tenure and prepayment charges levied on business loans provided by different financial institutions. Also, before applying for a business loan, you should check the eligibility criteria set by your potential lender. This will reduce the rejection chances of your business loan application. You can easily check your business loan eligibility with the help of a business loan eligibility calculator.
Documents to avail a business loan
Some of the basic documents required to apply for a business loan are mentioned as below:
- Identity proof:(Passport/Id card/voter card/driving license/Aadhar Card). It can be any one of them.
- Residence proof:(Passport/voter card/driving license/Aadhar Card/Ration Card). Applicants living in a rented house, have to submit their rental agreement.
- The applicant must submit their PAN card, which is an important document under the KYC formality.
- Salaried applicants have to submit their salary slip of the last three months as well as bank statements of the last six months.
- Self-employed applicants have to submit the ITR for the last three years. The registration of their business should be done beforehand.
- Two passport size colored photos.
Borrowers can apply for a business loan and submit their documents online. Once this is done, the verification process will be initiated. Post verification, the loan amount would be disbursed within a short span of time. Borrowers can choose the loan tenure and decide their monthly payable installments as per their convenience. They can also get an estimate of their EMI with the help of an online business loan calculator. This can help them plan their monthly expenses accordingly.
So what are you waiting for? Avail a business loan and take your first step towards your entrepreneurial journey today.