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Business Loan Faqs
In order to get the Term Loan what is the minimum amount of security that needs to give as additional?
The simple answer to this common question is that it depends on case to case and all the other requirements will be explained to you by the sales officer.
What are the required documents one need to submit to the bank in order to get the sanction?
Here is the list of the documents one need to submit before getting the Term Loan: - • You must have an Audited Financials of the previous 3 years. • Bank statement of the last six months. • Identity proof and address proof is compulsory. • Other necessary documents include the net worth statement and tax returns of the promoters/borrowers and for the guarantors. • Lastly you should carry the proof of the invoice on the purchase of the assets.
What is the minimum and maximum turnover requirement for the Business Instalment Loan?
The minimum turnover requirement is INR 4 million and the maximum turnover requirement is INR 300 million for the business loan.
For which entities is the Business Instalment Loan useful?
Business Instalment Loan basically targets the entities that includes proprietors, partnership firms, private limited companies and the professionals.
What is the additional security required to get the sanction for Business Instalment Loan?
One of the biggest advantages of this loan is that no collateral or additional security is required.
Who are the persons that are eligible for the lease rental discounting?
Lease rental discounting basically made for fulfilling the financial needs of the following entities: - • Professionals that includes sections of the societies like doctors, architectures, chartered accountants, business consultants. • Companies like public limited and private limited companies. • All the partnership firms. • And lastly for the sole proprietors and proprietorship firms.
What is the adequate security one need to give in order to get the sanction?
Rent receipts that are payable by the tenant directly and for a collateral security the underlying property that can be commercial or your quasi commercial property will work.
What is not allowed as a security?
If you are looking for the lease rental discounting loan giving no plot or self-construction or under construction properties will be allowed.
How is my loan eligibility calculated?
Business Loan eligibility depends on the following factors: Credit score of the loan applicant/co-applicant The last two years financials of the borrowing entity Information about the Debt Service Coverage Ratio: This information tells the lender whether the borrower will be able to service the EMI for the current loan.
Is pre-closure allowed in business loans?
Some banks have a lock-in-period of six months to one year for the business loan. While some others allow you to pre-close the loan even after the first EMI has been paid. Some banks may have a rule that a borrower can use his own funds to pre-close the loan and not use the balance transfer facility of another bank. Additionally, some banks allow pre-closure at no cost while some others charge an upfront fee of 2-5% of the pre-closed amount. Clarifications on this are to be sought from our business loan advisor during the processing of your application.
Is part payment allowed in a business loan?
Some banks may allow part payment while some others may have restrictions on how many times in a year you can part pay and also the minimum and maximum amounts you can part pay. Again, a clarification is to be sought from our loan advisor during the time of loan processing.
What is the minimum and maximum loan limit offered for a business loan?
In normal situations, the minimum loan amount offered is INR 100,000. This may go up to a maximum of INR 40,00,000. Higher loan amounts may be considered after an in-depth discussion between the borrower and the bank willing to lend.
How long does it take to disburse the business loan?
Finance Buddha will work with the concerned bank and get you the loan within 5-7 working days of your submitting the completed documents.
What is a Business loan?
Business loan is a 1-3 year unsecured loan given by banks, NBFC’s (Non Banking Finance Companies) or P2P lending platforms without asking for any collateral, guarantor or hypothecation of any assets. Entities like proprietorship, partnership, private limited company or public limited company are eligible for this type of borrowing. The usage of a business loan is left to the discretion of the borrower and can be used for working capital purposes, meeting short term cash flow requirements, investments into plant and machinery etc.
What are the documents required while applying for a business loan?
Borrower’s PAN card, address proof, last two years financial statements including profit and loss account and balance sheet, last six months bank statements, VAT/Service tax returns, partnership deed/MOA, existing loans repayment track record, partner/director’s PAN card, KYC, own house proof, ITRs, etc. Additional documents may be required on a case to case basis.
How is a business loan to be repaid?
All business loans are repaid through EMIs or equated monthly installments from the borrowers bank account. The borrower or customer is required to either give PDCs or sign an ECS mandate in favor of the bank disbursing the loan.
What happens if there is an ECS bounce or I miss an EMI payment?
The bank will levy certain ECS bounce charges or penalties. Additionally, that will also get reported in your credit report. Depending upon the severity and the regularity of the miss, it may have a serious impact on your future credit possibilities like in obtaining a home loan, car loan, etc. Additionally, banks may also take legal action against the borrower.
What is the rate of interest and processing fee on business loans?
The rate of interest varies from 16% to 23%. The processing fee of up to 2.5% of the loan amount is levied. Additionally, some banks may also insist on insurance cover.
What is a business loan?
A business loan is a loan given by banks or NBFCs for a period of one to three years. This loan is given without any collateral, hypothecation of assets or guarantor. Proprietorship companies, partnership businesses or private limited and public limited companies are eligible for this kind of loans. This capital may be used for working capital, meeting short-term cash-flow requirements, purchasing plant and machinery, etc.
What is the turnaround time for decisions a Loan against Property application?
Axis Bank will deliver its decision within 30 working days from the date of receiving of the application provided the request is complete in all respects. The calculation of 30 days shall start from the day on which the Customer delivers all documents essential for a proper appraisal of the application to the bank.