Business loans can be a great way to bring in extra cash for your business. These funds can be used for working capital, inventory purchases, everyday expenses, or marketing. Most banks and financial institutions provide business loans that do not require collateral. These unsecured loans work well for new businesses. You can opt for secured loans, where you can use any type of property or machinery as collateral. Business loans are more advantageous than loans because they offer a higher amount, lower interest rates, and a fixed term.

How do I get a loan for my business?

As with any loans one must apply for a business loan at the bank by filling out the form and attaching all the required personal and financial documents, either online or in person. The offline mode is time-consuming and cumbersome. Online business loan application is convenient. Fintech enablers such as LoansJagat provide a platform where the applicant can compare the interest rates of the business loans, EMI calculators, loan terms, conditions, and eligibility criteria with the eminent NBFCs that are affiliated.

The online platform of LoansJagat is very user-friendly. First, you need to provide your basic KYC information and financial information. You will see a list with the interest rates and terms of all banks that offer loans for business. Compare the offers and choose the bank that has the best deal. LoansJagat works to submit your loan request to selected banks. Your loan request will be managed by a dedicated relationship manager. This is the fastest, easiest, and most seamless way to obtain a business loan.

Business Loan Eligibility

Banks have different criteria for determining business loan eligibility. Some of these factors are taken into account by banks. The following are some of the factors that banks take into consideration:
  • Eligibility :Business Loans can be obtained by non-professionals , Sole Proprietors and Partnership Firms. Private Limited Companies or Public Limited Companies engaged in manufacturing are also eligible. Business loans are available to self-employed professionals such as doctors, CAs, CSs, Architects, etc.
  • The applicant for a business loan must be between the ages of 21 and 65.
  • Business loans ranging from Rs. The LoansJagat platform offers loans ranging from Rs. The platform LoansJagat offers loans up to Rs. The lower the interest rate, the higher the amount of the loan.
  • Interest Rate: The rate of interest varies depending on the lender you choose for your Business Loan. It usually ranges between 14.50% and 24.00%.
  • Loan Term: Since business loans are unsecured, they are given for a shorter period of time ranging from 1 to 5 years.
  • Age Of Business: Business loans are always risky for lenders because they are unsecured. Many banks and non-banking financial companies look at the age and growth rate of a business to ensure that it is a stable, authentic business and can earn enough profit to pay back the debt. Lenders look for a minimum of five years of business experience and a sales or turnover growth of 15-20% over the past three years.
  • Turnover Annual: Banks will offer business loans to companies that have an annual turnover of Rs. 1 Crore or more. Business loans are available for smaller annual turnovers.
  • Tax Returns: ITR reflects your income and repayment ability. Banks will approve business loans for applicants who have filed ITRs in previous years.
  • Banks check your account stability and repayment ability by looking at your bank statements for the last six months. Banks also consider the outbound and inbound bounced cheque status to determine your credit history.
  • Credit score of 650 and higher is considered acceptable for business loans.

Documents needed for a Business Loan

  • Signed Application Form
  • Identity Proof ( PAN
  • Residential Address Proof
  • The CA must certify/audit the last 3 years' ITRs (personal and business), profit & loss accounts, and balance sheets.
  • Last 12 months statement of bank accounts for self and business
  • Certificate of Existence and Proof
  • Business Profile
  • Office Address - Ownership/ Lease/ Rent Agreement/ Utility Bill