Whether Business is big or small, every business needs capital, capital is the basic foundation of business, to start it, to take it forward. It is not necessary that every businessman has money, and if there is no money then he cannot do business, it is not so at all. Loan is arranged only so that every person can trade as per his wish. There are many types of loans and many are given by financial institutions. Even the government is giving loans to increase small business. let’s see How to Apply for Small Business Loan in India.
The only difference is that everyone has their own terms of loan and their own rate of interest. We will tell you how to take a loan for small business. By the way, the government is also providing online loan application for small scale industries in 59 minutes.
Loan means lending in common language. The difference in this loan is so much, that it does not have to be taken from any individual, but from a private company or bank. The loan has three main grounds:
1) Principal Amount
Principal amount is the amount that is being taken as a loan. Whatever amount of loan is received after applying, it becomes the principal amount or principal.
2) Rate of Interest
It is most important, at what rate the interest is charged on the principal.
3) Duration of Loan
It is very important to keep in mind the duration for which the loan is taken and what is the last limit.
Eligibility of Business Loan
Before taking a loan, every bank has a plan for loan, in which it is decided which person is eligible to take a loan. The information related to this is as follows –
- The condition of any loan is that whoever is taking a loan should be a citizen of India. He should be more than twenty-four years old and less than fifty eight years old.
- The person is in a normal state, that is, he does not have any type of mental or physical serious illness.
Document Require of Business Loan
Whether government work or private loan, some documents are important for your identity. The list of loan documents is as follows:
- Passport Size Photo
- Copy of Aadhar Card
- Xerox of pen card
- Copy of last three years sales tax return
- Copy of last three years income tax return
- Bank account details
- Project Report
- Details of estimated accounts for the coming years
- Credit Monitoring Arrangement Data (CMA data, if required)
- Security papers or any liquid assets
- Two guarantors are also required to protect the people.
Important Point for Business Loan
For taking any loan, it is very important to pay attention to the information related to it, the main among them is as follows-
1.Planning of Business –
Before starting a business, a complete plan should be made, what item to trade, how much capital to invest, limit the expenses and decide the profit margin. Take care of all these things and do business, so that there is no loss.
2.Income of Source –
Whichever person is being given a loan, it is important to see through its income. Through which he is getting income and, how much income he is getting or the business he is taking loan for and how much he will get income from it. So that it can be known whether he will be able to repay the loan given or not.
3.Down Payment –
Whenever you want to take a loan, first see its down payment. The down payment, if we understand in general terms, is the amount of loan that will be received later. So the conditions related to this should be understood, so that there is no problem in the future. For example, we applied for a loan of fifteen lakhs. Out of which, we got three lakh rupees as soon as we took a loan, but later it is necessary to understand how we will get the down payment of twelve lakh rupees.
4.Rate of Interest –
The rate of interest should be ascertained before taking a loan. We should know at what rate the interest is being charged. And find out the interest in different banks. It has also happened many times that people had to pay more interest than the original. If the rupees are not filled, then the interest is charged at the compound rate.
5.Equal Monthly Installments (EMI)
There is a process to repay the loan after taking a loan, in which installments are made every month according to your income, which is called EMI. In which the amount of both principal and interest is added. And it has to be paid every month according to the installment made or it is deducted from the deposit in the bank account.
Age is also seen to take a loan, wherever a person is taking a loan, his age should be to repay that loan.
Process to Apply For Small Business Loan in India
1. To process the loan in the first phase, bring a form from a bank, read it well and understand it and then fill it up.
2. Collect all the documents appearing in it and attach a photocopy of each document, do not attach the original copy of any document with it.
3. The two guarantors that we are taking for the sign should be trustworthy, so that there is no problem in future.
4. Know the market value of any immovable property we are keeping as security.
5. After taking the loan, understand the time period from the bank for the down payment and ask for it according to your need.
Business Loan Intrest Rate
Every bank has its own different interest rates, which is very difficult to understand. Here we are telling the rates of some banks together, which will make the comparison very easy.
Interest rates in the name of banks
|Bank of Baroda||14.10%|
|Bank of Maharashtra||14.50%|
|Dhan Lakshmi Bank||13.15%|
|Indian Overseas Bank||14.90%|
|Punjab National Bank||12.65%|
|State Bank of India||11.20%|
|United Bank of India||13.00%|
This bank changes the rates of interest every year. Whenever you want to take a loan, you must know the rate of interest for that year, after that process the loan. that’s How to Apply for Small Business Loan in India