What is a Business Loan?
A Business Loan is a financial facility provided to entrepreneurs, self-employed individuals, and businesses to meet their working capital needs, expand operations, purchase equipment, manage cash flow, or grow their business. These loans can be secured or unsecured and are designed to support businesses at every stage.
Benefits of a Business Loan
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Business Expansion: Helps in scaling operations, opening new branches, or entering new markets.
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Working Capital Support: Manage daily operational expenses like rent, salaries, and inventory.
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Quick Access to Funds: Faster processing and disbursal compared to traditional funding options.
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Flexible Repayment Options: Choose repayment tenure based on business cash flow.
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No Profit Sharing: Retain complete ownership and control of your business.
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Improves Cash Flow: Ensures smooth functioning without financial stress.
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Tax Benefits: Interest paid on business loans may be tax-deductible (as per applicable laws).
Eligibility Criteria for Business Loan
Eligibility may vary from lender to lender, but generally includes:
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Applicant should be an Indian citizen
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Age: 21 to 65 years
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Type of Business: Proprietorship, Partnership, LLP, Private Limited Company
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Business Vintage: Minimum 1–3 years of business operation
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Minimum Turnover: As per lender’s policy
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Credit Score: Good credit history (usually 650 and above)
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Stable Income: Consistent business income and profitability.
Documents Required for Business Loan
KYC Documents
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Aadhaar Card
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PAN Card
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Passport / Voter ID / Driving License
Business Proof
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GST Registration Certificate
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Shop Act / Trade License
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Udyam Registration (MSME)
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Partnership Deed / MOA / AOA (as applicable)
Financial Documents
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Bank Statements (last 6–12 months)
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Income Tax Returns (last 2–3 years)
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Profit & Loss Statement and Balance Sheet
Other Documents
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Business address proof
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Passport-size photographs
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Loan application form