Top Features of Business Loan:

• Interest Rate: 13% onwards
• Nature of Loan: Short- and Long-term, Working Capital, Secured and Unsecured Loans
• Minimum Loan Amount: Rs. 10,000
• Maximum Loan Amount: Up to Rs. 50 crore, can exceed as per business requirements
• Repayment Period: Minimum 12 months and Maximum up to 5 years
• Collateral: Not required for Unsecured Business Loans
• Check and Compare from available business loan options at competitive interest rates.

Business loan interest rate start from 13% onwards which also depends on the eligibility of the applicant:

Note: The mentioned interest rates, fees and charges are subject to change and depend on the sole discretion of the bank, NBFC and RBI.

Below mentioned are the eligibility criteria for business loan:

• Age Criteria: Minimum 18 years at time of loan application & 65 years at time of loan maturity
• Indian Citizen with no criminal background
• Applicant with good credit score and no past loan defaults, if any
• Fees & Charges, Income, Business Turnover, Operational History, Business Vintage, Credit score and Profitability Criteria shall be defined by the respective financial institution

Below mentioned are the entities that can avail business loan:

• Individuals
• Startup Enterprises
• MSMEs
• Artisans, Retailers, Manufacturers and Traders
• Private and Public Limited Companies
• Closely Held Limited Companies
• Sole Proprietorship Firms, Partnerships, Limited Liability Partnerships and Large Enterprises engaged
• only in Manufacturing, Trading or Services sectors
• NGOs, Co-operative Societies and Trusts
• Self-employed individuals / Professionals - CAs, Doctors, Architects, Company Secretaries, Allopathic Doctors, Designers, etc.

Checklist of documents required for business loan:

• Recent Passport-sized Photographs
• Identity Proof - PAN card, Valid passport, Voter's ID card, Driving License
• Address Proof - Voter's ID card, Aadhar card, Passport, Driving license, Utility bill, Water Bill, Electricity Bill
• Business Address Proof
• Proof of business existence for last 3 years
• Last 6 months' bank statement
• Last 3 years’Income Tax Return (ITR)
• Balance sheet and Profit & Loss account statement
• Financial documents audited/attested/signed by Certified CA
• Copy of Trade License
• Sales Tax Certificate
• Certified Copy of Partnership Deed
• GST Registration Certificate
• Proof of ownership of the possessions used for business activities

Nowadays, banks are giving attractive schemes to women entrepreneurs. These lending schemes are exclusively for women and it gives them relief in terms of interest rates and collateral. Some of the banks also have special departments for women entrepreneurs where they provide them business consulting, training and counseling along with avenues for marketing and showcasing of their products. Women entrepreneurs whose ownership is less than 50% in the company are not eligible to avail the benefits of the women’s special schemes.

Some of the popular loan schemes for women entrepreneurs are as follows:

• Mahila Udyam Nidhi Scheme
• Mahila Samridhi Yojana
• Cent Kalyani from Central Bank of India
• Stree Shakti Package from State Bank of India
• Shringaar and Annapurna from Bhartiya Mahila Bank
• Dena Shakti Scheme from Dena Bank
• Udyogini Scheme

Below mentioned is the detailed table that will help in understanding the latest interest rates, processing fee and loan amount of business loans offered by popular financial institutions in India:

Note: The mentioned interest rates, fees and charges are subject to change and depend on the sole discretion of the bank, NBFC and RBI.

You can use business loans for various purposes, as mentioned below:

• For business expansion or relocation
• To meet working capital requirements
• Enhance business cash flow
• To purchase land or space for business operations
• To purchase equipment/machinery/raw materials
• To stock up inventory
• To pay rent/salaries/hire employees/staff training, etc.
• Scale-up operations or to upgrade technology
• New product or technology setup or installation
• Office premises’ renovation

Term Loan

Currently many types of term loans are available, such as short-term loan, long-term loan and other small business loans. An entrepreneur can avail these loans according to his/her requirements and economical position. Mainly the loan tenure for a short term loan is 12 months and for long-term loan it goes up to 5 years.

Term loans are divided into two parts, unsecured business loans and secured business loans. In secured loans, the collateral or security can be a certain property, machinery or a business ground and they will usually possess lower interest rates as compared to an unsecured one. Most of the business loans are unsecured loans and do not require any collateral or security to be submitted to banks or NBFCs.

Working Capital Loan

Working Capital Loans are are used to overcome the day-to-day financial requirements of enterprises. The daily expenditure of enterprises include paying-off salaries, buying raw materials, paying rent, undertaking trainings, etc.

MUDRA Loan Under PMMY

Micro Units Development and Refinance Agency (MUDRA) loan is a funding provided by most of the leading banks to Micro, Small and Medium Enterprises (MSMEs nationwide. Under the Pradhan Mantri MUDRA Yojana, loans of minimum Rs. 50,000 and maximum of Rs. 10 lakh are provided to start an enterprise or an SME unit. Through the Mudra Loan Yojana, the Government wants to ensure that proper funding is provided to first-time entrepreneurs or existing business owners.

PMMY is a scheme launched by Government of India to offer funds up to Rs. 10 lakh to non-farm small/micro enterprises and non-corporate companies. Mudra loan scheme is divided into three categories named as Shishu, Kishore & Tarun wherein these loans are offered by Private Sector Banks, Public Sector Banks, Regional Rural Banks (RRBs), etc.

Loans for Self-employed Entrepreneurs

This is the most popular category among all as the loans for self-employed entrepreneurs are taken in large numbers. The loan amount can range anywhere between Rs. 50,000 being the minimum and can reach up to 10 crore. The interest rate offered depends on the financial history of the applicant and is decided by the lenders as per their discretion.

Stand-Up India

Stand-up India scheme was introduced by Government of India to provide funding to people who come under SC/ST category and women entrepreneurs. The primary purpose of this scheme is to help banks in offering loans between Rs. 10 lakh and Rs. 1 crore to at least one SC/ST borrower and at least one women entrepreneur per bank branch in enabling them to set-up their own enterprise.

Startup India

Startup India Scheme is an initiative by the Government of India that offers financing and handholding support to Startup entities for growth and expansion. Additional key functions include promotion of Startups, wealth creation and employment generation. To avail benefits of government schemes, an entity needs to be recognized as a Startup by applying on Startup India Mobile App/portal and obtaining the certificate of recognition.

Bill-Invoice Discounting

Invoice discounting is a financial instrument offered by banks and NBFCs. Bill discounting is a source of working capital finance for the seller of goods on credit. it is a discount which, a financial institution takes from a seller’s customer. Through the payment being made by letter of credit, buyer has the option of buying goods from the seller. Bills that come under bill discounting are termed as ‘bills of exchange’.

Letter of Credit

Letter of credit is a payment instrument used mainly in international trade in which bank provides monetary guarantee to enterprises which deal in import and export of goods. Letter of credit is used for both import and export of goods. Enterprises doing businesses overseas have to deal with unknown suppliers and they require assurance of payment before performing any transaction. Therefore, letter of credit is important to provide payment assurance to the suppliers or exporters.

Point of Sale

Point of Sale Loan is a type of funding wherein merchants offer their customers some financial assistance at point of their purchase. This funding is provided in order to assist their customers in buying a product or service from their shop. Business owners, enterprises, MSMEs, entrepreneurs, retailers can avail Loan against POS machines to start a new business or to manage their existing businesses. Point of Sale Loan is also termed as Merchant Cash Advance in which the loan amount depends on business volume generated via POS terminals.

Overdraft Loan

An overdraft means overdrawing money from ones’ current/savings account. In simpler words, an account holder takes out more money that has been deposited in the account. An agreed rate of interest will be charged, if the overdrawn amount is within the limits of a preceding agreement. 

Read More: Types of business loans

Government launches Atmanirbhar Bharat Abhiyan 2020

12 May 2020: Government launches Atmanirbhar Bharat Abhiyan 2020
Launched on 12 May, 2020 by Government of India, Atmanirbhar Bharat Abhiyan or Self-reliant India Scheme 2020 is a funding support scheme for the MSME sector to boost and promote growth and increase employment opportunities in rural and urban areas across India. Its main features include: 

• MSME Loans worth of Rs. 3 lakh crore
• Rs. 20,000 crore loan option for MSMEs
• Repayment Tenure of 48 months with moratorium period offered is 12 months
• 100% Credit Guarantee Scheme
• Approx. 50 lakh shopkeepers to benefit, running pedestrian shops
• Collateral Free Loans to MSMEs
• For loans up to Rs. 3 lakh, releif of 2% in interest rate
• Loans of amount Rs. 10,000 offered to pedestrian business owners
• Manufacturing and Service MSMEs shall be considered as same entities

Self-reliant India is a scheme focusing on MSME sector and it does not mean cutting from rest of the world. New MSME definition was introduced as mentioned:

Step 1: Download and Open the CreditexpertindiaApp from Google Play Store or App Store
Step 2: Tap on the Business Loan icon and fill in all the required details
Step 3: Details to be filled shall include Loan Amount, Nature of Employment, Annual Business Turnover, Work Experience, Residence and Residence Type (Owned or Rented)
Step 4: Tap on 'Proceed' to fill in few more details like Business Type, Primary Bank A/C, Nature of Business, Annual Profit, Date of Birth, Full Name and email address
Step 5: Mention details of any loan taken in past, details of existing credit card, if any and Purpose of Loan (Select from Dropdown)
Step 6: Tap to 'Proceed' to Check and Compare from best available loan deals from banks/NBFCs
Step 7: Tap on 'email quote' to get loan related information via email on the mentioned email address or Tap on 'Call' to dial Toll Free number to talk to a loan representative regarding loan details

To apply for business loan or working capital loan, applicants can visit creditexpertindia.com to check, compare and pick from various loan options available from numerous financial institutions at competitive interest rates. At , customers can submit the basic details for loan discussion with the customer care representative and further to perform loan formalities with the bank's relationship manager. The loan approval shall depend on the documents submitted, applicant's profile, nature of business and sole discretion of bank, NBFC or respective lender. 

Ques. I am 19 years old; can I get a business loan?
Ans. Yes, any individual who is 18 years and above at the time of loan application is eligible to apply for business loan.

Ques. How much is the minimum and maximum loan amount I can get?
Ans. The minimum loan amount offered is Rs. 10,000 and maximum loan amount can exceed Rs. 50 crore, depending on the business requirements and applicant’s profile.

Ques. What is the maximum age of availing business loan?
Ans. The maximum age of availing a business loan is up to 65 years at time of loan maturity.

Ques. What is the Business loan interest rate offered by financial institutions?
Ans. Interest rate offered by various banks and NBFCs starts from 13% onwards.

Ques. For how long I can repay the loan amount?
Ans. You can repay the loan amount in minimum 12 months and maximum up to 5 years, depending on the respective bank or NBFC.

Ques. Do I need to submit any collateral to bank before applying for a business loan?
Ans. No, you are not required to submit any collateral to bank or NBFC, for few specific secured business loans, collateral is required.

Ques. What are the repayment, pre-payment and foreclosure charges and processing fees of a business loan?
Ans. All the fees and charges of a business loan vary from bank to bank. Every financial institution has different charges, so you need to check online from their official website.

Ques: What are the types of business loans in India that I can avail?
Ans: There are different kinds of business loans offered by banks and NBFCs and that include MSME loan, Mudra loan under PMMY, secured and unsecured business loan, short- and long-term loan, working capital loan, equipment finance, line of credit, equipment finance, bill discounting, loan for construction equipment, machinery and equipment purchase loan,

Ques. What are the loan schemes initiated by Government of India?
Ans. Some of the popular schemes include MUDRA scheme under PMMY, SIDBI loan, CGTMSE, PMEGP, Standup India, Startup India, NSIC, NABARD, etc.