If you run a small business or start-up, you will know the importance of business funding. Business loans help enterprises get the much-needed boost required to expand business operations, purchase equipments and machinery, funding working capital needs to help the organisation function smoothly and scale new heights.
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Listed below are some of the general eligibility criteria of small business loans:
See Also: How To Get A Business Loan From A Bank?
Banks provide loans to individuals after verification of the authentic documents and income and address proof. So, the applicant must submit the following documents to start the verification process of small business loan:
See Also: Taking Business Loan from Private Banks
Easy Accessibility: Small business loans offer an opportunity for businessmen to avail funds and receive financial grants easily. To avoid loan ejection the customers can go through the eligibility criteria and check the online loan EMI calculator to make informed decisions and manage finances efficiently. Most of the banks and NBFCs provide easier management of loans by enabling online loan submission. These customized loans provide businesses with a much-needed boost.
Multiple Repayment Options: Unlike salaried individuals, the businessman does not always receive a steady flow of cash. The lenders have identified the complexities and challenges of operating a business and have come up with a personalized repayment plan. Under this plan, the borrower can opt for monthly EMI payment or the bullet payment method as per the financial standing of his business. This enables the borrower to manage his debts and finances in a better manner.
Hassle-free Application Process: The small business loans require minimal documentation and have a simple application process. Also, the online application method is a convenient and hassle-free option as the customers do not need to step out of his workplace to avail loans.
Affordable Interest Rates: The rate of interest of small business loans are determined based on factors like loan tenure, the creditworthiness of the applicant, the business financial condition and market dynamics. Generally, banks and NBFCs offer a moderate rate of interest on business loans to make them affordable. Other charges include processing fees and other one-time charges.
No Collateral Required: These are collateral-free loans which means you do not need to pledge your business assets as security to avail funding from banks. Collateral free loans take less time to process and the interest rates and sanction amount are determined based on business cash flow.
Tax Relief for Businesses: The interest payment on a business loan is liable to receive income tax benefits under the Income Tax Act, 1961.
See Also: Types Of Business Loans
The borrowers can apply for a business loan in three different ways. They are:
Online Loan Application: the customer can visit the online website of the lender or login to their net banking accounts for small business loan application. Here, the applicant can fill the application form with his personal details and upload the necessary documents. The lender verifies the documents and approves the loan application. Once the loan is sanctioned the balance is directly credited to the bank account of the applicant.
Through Customer Care: the applicant can also call the bank’s helpline number to initiate the business loan process. The customer care executive will guide the applicant through the business loan application process.
Offline Loan Application: the customer can also visit the bank branch personally and meet the loan officer. The applicant needs to submit the application form along with copies of the above-mentioned documents.
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