If you are dreaming to start your own business, this might be the best time to take a small business loan. While banks are now more flexible in providing business loans, it must be remembered that some terms and conditions are always there. Let us check out some of the most crucial facts you must know about business loans.
Online business loans are the present reality
Now you need not stand in long queues to take loans. Banks have now made the process easy. Visit the bank website, choose the loan type and apply. Either you can directly borrow money from the bank, from the institutional investors or from the individuals.
Business loans are quite flexible these days
A business loan is available for varied purposes. You can use a business loan to set up ancillary units of the existing business or to start a new business. This kind of loan is ideal to expand the business, invest in expensive technology or to generate more working capital. You must submit a report regarding how you intend to use the loan while applying for it.
There are multiple business loans to choose from
If the business is different, the need for loan will also differ. Keeping this in mind banks have come up with a wide range of online business loans which include:
- Loans against property
- Strategic business loans
- Loans for commercial vehicles
- Loans for construction equipment
- Agricultural loans ( for crops & equipment)
There is an eligibility criterion
Though RBI is encouraging more and more individuals to come up and set their own businesses, there is a set of criteria which an individual or a company most fulfil to get the business loan. The criteria are:
- The borrower must be in the age group of 21 and 60 years.
- The business should be registered, that is, you must have a trade license.
- The business should be at least 3 consecutive years.
- The business should have filed IT returns for at least 3 years.
- Address proof, identity proof and last 6 bank statements are needed.
All loans do not require collaterals or guarantors
Banks are encouraging Indians to expand businesses without disturbing their personal financial status. For this reason, they are now offering loans which do not require any collateral or guarantor. Unsecured loans are given for short terms and in shorter amounts while secured loans are lump sum and for longer durations.
Business loans can be transferred
If you think that you are paying more EMI or if you find the payment options more flexible at any other bank, you can easily transfer your business loan to another bank. Do remember there is a processing fee for transferring loans from one bank to the other.
100% loans are not available
If you are in need for a loan of 5 lacs, it is not certain that you will get 100% of the amount. You must arrange for some cash and the rest you can take as loan from the bank.
Last but not the least select a bank for online business loans which fulfils the below checklist.
- Quick eligibility check
- Easy and fast disbursals
- Flexibility tenure to repay
- Transparent policies and no hidden costs.
So get a flexible business loan without further ado and take all your entrepreneurial dreams towards a success-driven fruition!