Small business does not require much capital to set up. A country like India has a number of small businesses across the nation. Funding small businesses is simple but on the contrary it is hard to find a proper lender to finance your small business. Recently government has started many a schemes that allow one to finance his / her small and medium businesses with easy terms. But it is not for all. The restriction in the category of businesses stops other small entrepreneurs to opt for loans for their small business. However there are banks and non-banking financial corporations that provide diverse types of small business loans.

What is Small Business Loan?

Now the most important question to be asked is how do you know whether your business is small, medium or large? If you think that your office space shows the size of your business then let me clear the air here. It is not the size of the office but the business that matters along with the annual revenue. Economically by small business we mean if your organisation has less than 100 employees and the annual revenue is less than Rs. 25 Cr per year.

Whether your business is small in size or large, loan is an essential thing for your business. Business loan is a broad concept and small business loan is the part of it. Generally term loans are considered as the best small business loans. Term loans can be for short period of time or can be of longer period of time, in any case it is the best way to finance your small sized business.

The tenure of short term business loan is as low as 3 years and the tenure of long term business loans can be of at the max 15 years. There is also shortest term loans in which overnight loans are being sanctioned to the entrepreneurs but it does not always support small businesses.

What is the best time for you to get a loan for your small business?

When it comes to small business one must be terribly careful about loans and advances. Even banks need to be extra careful here as the business does not have much history in the industry. Loan for small business is tough to get. The best possible times in this case to get a loan are as follows:

  1. When you don’t need it at all. Is it bit misleading? Actually not, when the business is doing well and it is running for more than 2 years then taking up loan will be the best choice for your business.
  2. As said that take loans when you don’t need it that means when your business is running well, making profits and your monthly turnover crosses ₹ 1,50, 000/-.
  3. If you are aged between 21 to 65, then that is the best time to ask for small business loans
  4. Many people who are already employed but planning to quit their jobs and start something on own. In this case if the employees have good employment history then asking for loan would be a good option to support the business.
  5. You are sure about the future profits and growth of the business.

There are times when one should not ask for small business loans that is the bad time to get small business loans are as follows:

  1. When your business is at bad position, not doing much good or it is less than 2 years old.
  2. When you are too young or too old to handle the business or risk related to it
  3. If your partners or co-applicants have any kind of criminal record
  4. If your business has witnessed losses in recent future or even if your business is making profit but the monthly turnover is less.
  5. You already quit your job and unsure about the growth or future of the business.

How to Get Small Business Loans?

In India many banks have the provision of small business loans like Bank of Baroda, ICICI, HDFC and lot more. Government banks also provide loans for the SMEs in much relaxing terms. There are NBFCs as well. Au Financiers, Magma Fincorp, Fullerton India are some of the leading names that provide small business loans.

List of Small Business Loans in India by several Lending Institutions

There are many banks and NBFCs in India that provide small business loans. I have come up with these following best of all loans in India.

  • ICICI Bank Smart Business Loans
  • HDFC Bank Business Loans
  • Kotak Mahindra BankPersonalised Business Loans and Solution
  • Banks of Baroda – Loans and Advances
  • Federal Bank – Small Business Loans
  • SIDBI – Small Business Start up Funding
  • Au Financiers – Small and Medium Enterprises Loans
  • Magma Fincorp – SME Loans
  • Fullerton India – Business Loans

You can visit each of these institution’s website to compare the best option for you, or you can just click on the “Apply for Business Loan” button below to see the best Business Loan offers for you!