Get Personal Loan in 2 Hours! Apply for Instant Personal Loan Apply NowX

Frequently Asked Questions about Business Loans

4.8 stars based on 665 reviews

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.

How is my loan eligibility calculated?

Loan eligibility is dependent on primarily the following factors:
  1. The credit score of the entity and/or the partner/director/proprietor of the borrowing entity as reflected in your CIBIL or Equifax report or any other credit bureau. Having a good credit score is a necessary but not a sufficient criteria. If the credit score is a border line case then the bank may take a subjective call to limit the loan amount.
  2. The last 2 year financials of the borrowing entity. Factors like turnover, partner/director salary, depreciation, interest cost, net profit after tax are some of the key parameters that goes into deciding the loan amount.
  3. Ability to service the EMI for the current loan be requested as depicted by the Debt service coverage ratio (DSCR). Banks generally ask for a DSCR of 1.0 to 1.5 depending on case to case basis.

Pre Closure vs part- prepayment?

Pre closure means that a customer wants to close the entire principal outstanding amount at one go. Whereas part payment means that a customer wants to repay only a certain portion of the outstanding amount. Please ask our advisor for more details on this when your loan is being processed.

Is pre closure allowed in business loans?

Some banks have a lock-in of 6 months to a year while some banks allow you to pre close even after the 1st EMI has been debited from your bank. There may also be restrictions that you can only use your own funds (and not the balance transfer cheque of another bank) to pre close a loan. In addition, banks may allow pre closure at no cost or may levy a pre closure fee (2-5% of the amount being pre-closed). Please ask for clarifications to our or the banks’ loan advisor on all these factors before signing the loan document.

Is part payment allowed in business loans?

Some banks like Bajaj Finserv allow part payment. However, there can be restriction on how many times in a year you can part pay and the minimum and maximum amount that you part pay. Again, please ask for clarifications to our or the banks’ loan advisor on all these factors before signing the loan document.

What is the minimum and maximum loan limit offered for business loan?

Generally, the minimum amount loan amount is Rs 100,000 and maximum amount is Rs 40,00,000. Higher loan amounts are dependent on a personal discussion that a bank may want to have with the borrower and then take a call on the loan amount.

How long does it take to disburse the business loan?

Finance Buddha will work with the banks to try and get you the loan within 5-7 working days of submitting completed documents.

Documents required while applying for a business loan?

Borrowing entity's PAN card, address proof, last 2 years financials (balance sheet, profit & loss, audit report), last 6 months bank statement, VAT/service tax returns, partnership deed/MOA, existing loans repayment track record. Additionally, the partner/director's PAN Card, KYC, own house proof, ITRs etc. On case to case basis additional documents may be required.

How does business loan repayment happen?

All business loan repayments happen in the form of an EMI (Equated Monthly Installment) through the customers bank account. The customer needs to give few PDCs (Post dated cheques) and sign an ECS mandate in favour of the bank disbursing the loan.

What happens if I miss an EMI payment or there is an ECS bounce?

The bank will levy certain ECS bounce charges/penalties. In addition it will get reported in your credit report. Depending on the severity of the default it can have serious impact on your future credit possibilities like a home loan, car loan etc. In addition, the banks can 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% and a processing fee of upto 2.5% of the loan amount. In addition some banks insist on an insurance cover also.

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.

What are the minimum and maximum amounts of Loan against Assets that I can get?

At Axis Bank, you can get a Loan against Assets from Rs. 2 lakhs to Rs. 500 lakhs. Some of the factors we study when deciding a loan amount are: • Your requirement and eligibility • The property’s registration • The property’s market value • Your income and repayment capacity

I am an NRI. Can I get a Loan against Property?

Yes! Axis Bank offers LAPs for waged NRI customers.

Do I need to pay a fee to gain a Loan against Property?

Yes, Axis Bank charges a non-refundable handling fee for every LAP application. The processing cost of a benefit of an Axis Bank Loan against Assets is up to 1% of the loan amount plus service tax as pertinent.

When is my EMI due?

The EMI will be due on a permanent date each month. You will be alerted of this time when your loan amount is paid.

How soon after the foreclosure will I get back my original property papers?

Once your loan account is closed, you may collect your property papers after 16 days from your adjacent Axis Bank Loan Centre.

How do I exclude my Loan against Property? Will there be any charge for the foreclosure?

Before we work with the foreclosure, all unresolved dues must be cleared. So we request you first to check for and clear any residual amount that may be payable towards your Home Loan by applying for a foreclosure report from your nearest Axis Bank Loan Centre.

How do I update my mobile number and the email address recorded under my Loan against Property account?

You may up-to-date your mobile number and email id in either of the following ways: By calling any of the toll-free numbers: 1800 209 5577 or 1800 233 5577 or 1800 103 5577. Using your registered email id to write to loans@axisbank.com

Can I get an overdraft against my assets?

Yes! An Axis Bank Loan against Properties can be availed of either as a Term Loan with an EMI repayment selection or as a Dropline Overdraft Facility.

What are the different property types considered under the Loan against Property scheme?

Axis Bank Loan against Property can be availed for a self-occupied house or commercial property.

How can I know if am eligible for a business loan?

Make use of the Finance Buddha eligibility form to check your eligibility before applying for a loan.

What are the ways of repaying the loan?

It can be repaid through post-dated cheques or through ECS.

What is the maximum tenure for a business loan with Bajaj Finserv?

You can avail loan up to 48 month it you meet the necessary criteria.

What is the maximum limit of loan amount that can be availed from Bajaj Finserv?

Loan can be taken up to 30 Lakhs for tenure of maximum 4 years

When can I expect the money once the business loan is approved?

Money will be credited your account within 72 hours once the loan amount is approved.

Is there any fore-closure charges and when can I fore-close my business loan?

There are no fore-closure charges and the business loan can be fore-closed any time after making the 1st EMI.

What are the interest rate advantages when a loan is pre-paid?

There is no interest charged on the amount that is pre-closed. Only on the outstanding amount interest are applicable.

Are there pre-approved offers on business loans for customers of Bajaj Finserv?

Yes, existing customers can avail the option of pre-approved loans.

What is the age limit to apply for a business loan with Bajaj Finserv?

You can apply for a loan when you are in between 25 to 65 years of age.

Are there any charges by Finance Buddha for the service offered?

No, there are no charges implied on the customers of Finance Buddha. This platform offers services for absolutely FREE!

What are the common and the must submit documents?

• Complete loan application form with one passport size photograph • Valid Proof of Applicant's Identity: Passport, PAN card, Voter identity card , Driving license • Proof of Residence: Ration card Tel/ Electricity Bill/ Lease agreement/ Trade license /Passport /Sales Tax certificate • Proof of Age: Passport, PAN card, Voter identity card • Financial Documents

What are the factors considered by Capital First to calculate the interest rate?

Factors mainly considered are the age, income, credit scoring, outstanding liabilities, residence location, company an individual is working for and so on.

What is collateral and why is it needed for a business loan?

It is the security that is pledged with a bank to avail loan, the more the collateral value is, the benefits are more. This gives a security for the banks to offer bigger amount of loans as the risk is low. Not every bank needs collateral for approving loan.

How important in credit worthiness in loan approval?

It is advisable to not apply for too many loans, limit yourself according to the necessity. Credit score will go down as and when you apply for more and more loan.

What should be my CIBIL score for applying for a business loan with Capital First?

The credit score should be minimum 750+ to be eligible for a business loan at Capital First.

What the best possible rate of interest I can expect from Capital First?

Anything between from min 16 (percentage) to 22 (percentage) is considered as a good deal.

What is the tenure for business loan from Capital First?

Tenure - minimum of 24 months to maximum of 36 months. While most of the banks have the minimum limit as 12 months, Capital First has minimum limit as 24 months

Is it alright to make huge purchases for business needs while availing for a business loan?

Huge purchases and outstanding debts will impact the loan approval, thus avoid the same. The rate of interest will be high for low credit rating.

What should be the minimum operation period for the loan?

Irrespective of what type of business it is, the minimum operation period is of two years or more. The longer a business has been in existence the more is the probability of getting a loan.

What is the formula for EMI calculation?

Loan amount x Interest/12) x [(1+ interest rate/12)^loan tenure in number of months] / ([(1+ interest rate/12) ^ loan tenure in number of months]-1

What are the features and benefits the Finance Buddha EMI calculator can offer?

It offers convenience, accuracy, and speedy calculation, specific details of each type of loan and Amortization tables etc.

What is the tenure for business loan from Citibank?

Tenure - minimum of 12 months to maximum of 48 months.

What the best possible rate of interest I can expect from Citibank?

Anything between from min 13 (percentage) to 20 (percentage) is considered as a good deal.

What the best possible rate of interest I can expect from Citibank?

Anything between from min 13 (percentage) to 20 (percentage) is considered as a good deal.

What should be my CIBIL score for applying for a business loan?

The credit score should be minimum 750+ to be eligible for a business loan at Citibank.

How fast can I expect the business loan from Citibank?

If all documents are submitted on time and if all eligibility criteria are met, loan can be availed within 6-8 days.

How important in credit worthiness in loan approval?

It is advisable to not apply for too many loans, limit yourself according to the necessity. Credit score will go down as and when you apply for more and more loan.

What are the business needs for which business loan can be used?

Outstanding debts and huge purchases will definitely impact loan approval, thus try to avoid it. The interest rate high if the credit rating is low for the individual.

What is the easy way to get business loan?

Make use of the option in Finance Buddha by giving few basic details like name, contact details, loan amount, type of business and income from business will give you a list of banks that can offer business loan, use this information to compare and apply. The application will be processed by banks and will contact you to the request to next level of processing.

How important is the performance of business considered for business loan?

The revenue pattern, years of operation, credit worthiness is evaluated for an existing business before considering for loan processing. Company credit score is associated with tax ID number as well as the incorporated name.

What are the factors considered by Citibank to calculate the interest rate?

Factors mainly considered are the age, income, credit scoring, outstanding liabilities, residence location, company an individual is working for and so on.

What should be the minimum operation period for the loan?

Irrespective of the type of business, the minimum prior operation tenure is two years or more. Longer the business is in existence, greater is the benefit.

What is collateral and why is it needed for a business loan?

It is the security that is pledged with a bank to avail loan, the more the collateral value is, the benefits are more. This gives a security for the banks to offer bigger amount of loans the risk is low.

What is the minimum processing time for a business loan by Citibank if I have an existing loan?

There are applications who have received top up loan amount on the same day. As all documents are readily available, they will simple recheck the CIBIL score and business performance and will approve the loan amount.

How much business loan amount can be availed through HDFC bank?

From INR 50,000 to INR 4,000,000 can be availed depending on the income of the applicant.

How do I repay my business loan?

It should be repaid through EMIs- Equated Monthly Installments; it can either be through standing instructions and post-dated cheque.

Is there any need for security to obtain a Business loan?

There is no need for collateral or security for availing a business loan.

What is the business loan tenure?

It can be between 12 months to 36 months depending on the applicant’s requirement.

Is there an option to pre-close the business loan?

Yes, the option is available however only after 1 year.

What is the average approval time for a business loan?

Loan will be approved by an average 3 days’ time if all documents are accurate and if the applicant meets the eligibility criteria.

What are the documents required for business loan?

The below documents are required: Income proof, bank statement and one photograph KYC-PAN, address & ID proof

Is there part-payment option for HDFC bank business loan?

No, this option is not available in HDFC bank for business loan.

What is the age limit to apply for a business loan?

The applicant should be between 21 years to 60 years to apply for a business loan.

Is there any processing fee for HDFC bank business?

Fortunately, the answer is no, there is no one-time fee requirement.

Which are the business loan products in ICICI bank?

There are mainly 2 types of business loan- working capital loan and business loan.

What is the lowest EMI that I can opt for from ICICI bank business loan?

The lowest EMI amount is INR 2,035 for every INR 100,000.

What is the business loan interest rate range at ICICI bank?

Interest rate for business loan at ICICI starts from 16.85%, it totally depends on the applicant’s eligibility criteria.

What is the business loan tenure at ICICI bank?

Business loan from ICICI bank can be repaid by 84 months. This is one of the best banks that offer longest business loan tenure.

Is prepayment option of business loan possible at ICICI bank?

Prepayment is allowed with charges of 2% of the outstanding amount; however this is possible only after 6 EMI payments.

Can I transfer loan from different bank to ICICI Bank?

Yes, the option is available however there are some eligibility criteria to be met.

Is part payment of business loan available in ICICI bank?

No, this option is not available currently at ICICI bank for business loan.

Is there an option to pre-close the business loan?

Yes, the option is available however only after 6 months.

What is the average approval time for a business loan?

Loan will be approved by an average 4 days’ time if all documents are accurate and if the applicant meets the eligibility criteria.

What are business loan interest rates at ICICI bank?

Interest Rate 16.85% Lowest EMI INR 2,035 for every INR 100,000 Tenure From 12 months to 84 months Loan Amount Max INR 10,000,000 Part Prepayment, Charges Not allowed Early Foreclosure, Charges Allowed after 6 EMI's, 2% in case of Balance Transfer

What are the documents required along with a business loan application?

Complete loan application form with one passport size photograph Valid Proof of Applicant's Identity: Passport, Photo PAN card, Voter’s identity card , Driving license and MAPIN card Proof of Residence: Ration card Tel/ Lease agreement/ Electricity Bill/ Passport/Trade license /Sales Tax certificate Proof of Age: Passport, Photo PAN card, Voter’s identity card Financial Documents

Does online application actually work?

Through Finance Buddha you can simply apply for the loan and ICICI bank will contact you directly to take the proposal to the next level.

Will there be tax benefits if I apply for a loan from ICICI bank?

Yes, you can avail tax benefits if you have a business loan from ICICI bank or from any other authorized banks.

Is there any fee or charges by Finance Buddha platform if we use this for applying a loan?

No, Finance Buddha is an absolutely free platform for those who are looking to get all information about loans and even for applying for the same.

Will banks get a notification to contact me if I apply through Finance Buddha?

Yes, they will get notified and accordingly to their turn-around time limit an official will contact you to take the request to the next level. Some banks have turnaround time as 48 hours while some need at least 5 business days.

Does online application actually work?

Through Finance Buddha you can simply apply for the loan and IndusInd bank will contact you directly to take the proposal to the next level.

Will there be tax benefits if I apply for a loan from IndusInd bank?

Yes, you can avail tax benefits if you have a business loan from IndusInd bank or from any other authorized banks.

Will banks get a notification to contact me if I apply through Finance Buddha?

Yes, they will get notified and accordingly to their turn-around time limit an official will contact you to take the request to the next level. Some banks have turnaround time as 48 hours while some need at least 5 business days.

What are the documents required along with a business loan application for IndusInd Business Loan?

1. Complete loan application form with one passport size photograph 2. Valid Proof of Applicant's Identity: Passport, Photo PAN card, Voter’s identity card , Driving license and MAPIN card 3. Proof of Residence: Ration card Tel/ Lease agreement/ Electricity Bill/ Passport/Trade license /Sales Tax certificate 4. Proof of Age: Passport, Photo PAN card, Voter’s identity card 5. Financial Documents

What is the average approval time for a business loan?

Loan will be approved by an average 3.5 days’ time if all documents are accurate and if the applicant meets the eligibility criteria.

Is part payment of business loan available in IndusInd bank?

Yes, this option is available currently at IndusInd bank for business loan.

What is the lowest EMI that I can opt for from IndusInd bank business loan?

The lowest EMI amount is INR 2,327 for every INR 100,000.

What is the business loan tenure at IndusInd bank?

Business loan from IndusInd bank can be repaid by 60 months.

Can I transfer loan from different bank to IndusInd Bank?

Yes, the option is available however there are some eligibility criteria to be met.

Why should women entrepreneurs choose IndusInd bank for business loan?

The level of attention and offered given to women entrepreneurs are exceptionally great as compared to what other banks offer.

What can the business loan amount be used for?

The loan amount can be used for expansion of existing business, for crafting a whole new business from scratch. It can also be used for the working capital purpose and more.

Who can avail this business loan and what is the eligibility?

Below are the important few criteria to be eligible for a business loan from Kotak Mahindra Bank Age at least 23 and less than 55 Self Employed - 5 years in business with 3 Years IT Returns Net Profit should be greater than INR 250,000 p.a.

What are the necessary or must submit documents for financial proofs?

Keep all original documents handy like revenue slips, bank statements, tax payment receipts and other financial documents.

How to have a good credit score or increase the score soon?

Ensure to make regular payment on outstanding debts and beware of the penalties.

Is applying for too many loans a good option to check creditability?

Don’t apply for too many loans, limit it as per the necessity- the Credit scoring will reduce if you have more debts.

Is it fine to make huge purchases for personal or business needs while availing for a business loan?

Huge purchases and outstanding debts will impact the loan approval, thus avoid the same. The rate of interest will be high for low credit rating individuals.

What is the easy way to get business loan?

Make use of the option in Finance Buddha by giving few basic details like name, contact details, loan amount, type of business and income will give the list of NBFCs and banks that can offer business loan, use this information to compare and apply. The application will be processed by banks and will contact you to the request to next level of processing.

What are the ways to choose right business loan?

Step 1: Complete all paper work well in advance Step 2: Draw an approximation of how much cash is required right now and for future Step 3: Hunt for expert’s assistance Step 4: Check what are the fee, rate of interest and other charges for each bank Step 5: Decide whether you need a long-term business partner or if the need is just quick capital for investment Step 6: Ask the right questions without hesitation Is the performance of business crucial for business loan? For an existing business, the revenue pattern, the years of operation, credit worthiness is evaluated prior to considering for processing. Independent credit score for a company that is associated with the tax ID number and legally incorporated name is considered.

How much important is given to a business plan while applying business loan?

Even if there is no existing business, having a great business plan with execution blue-print will be legally measured and scrutinized by banks before offering a business loan.

Is there special business loan offered for women entrepreneurs at Kotak Mahindra bank?

Yes, this special benefit is available and the features for the same are: • Fixed interest rate starting as low as 11.5% to 19.65% • Upto 2% processing charges • Maximum limit for business loan amount is 15 lakhs • Tenure range is 1-5 years • Conditional pre-closure - after 1 year • Average approval time is 4.4 days • Services are offered at door step • Applicant can make use of balance transfer and top-up loan options • Age at least 21 and less than 55 • Income should be more than Rs. 25,000 per month

Why do women entrepreneurs choose Kotak Mahindra bank for business loan?

The level of attention and offered given to women entrepreneurs are exceptionally great as compared to what other banks offer.

What are the common and must submit documents?

• Complete loan application form with one passport size photograph • Valid Proof of Applicant's Identity: Passport, PAN card, Voter identity card , Driving license • Proof of Residence: Ration card Tel/ Electricity Bill/ Lease agreement/ Trade license /Passport /Sales Tax certificate • Proof of Age: Passport, PAN card, Voter identity card • Financial Documents

What should be the minimum operation period for the loan?

Irrespective of what type of business it is, the minimum operation period is of two years or more. The longer a business has been in existence the more is the probability of getting a loan.

What is collateral and why is it needed for a business loan?

It is the security that is pledged with a bank to avail loan, the more the collateral value is, the benefits are more. This gives a security for the banks to offer bigger amount of loan as the risk is low.

How important is credit scoring and what is the minimum score needed?

All applicants who have good credit score can walk into any bank to get a business loan. The better your score is, you can avail more benefits and the interest rate will also depend on the same. Minimum score should be 750+.

What is the processing fee for a business loan?

It is a one-time payment made to the bank to process the loan amount. It’s the extra cost incurred for the service charges. This is not refundable and interest will not be provided on the same. Irrespective what loan you are looking for, this charge is mandatory and has to be paid at the first stages.

What are prepayment charges in a business loan?

If ever you wish to pre-close your loan amount prior to its tenure, this can be done so by paying the additional prepayment charges. This amount is calculated on the outstanding loan balance by the bank to check the service charges and other related charges.

What is the limit of Flexi cash?

Flexi cash is basically designed for SMEs. It usually gives you the free cash deposit limits ranging from INR 4.5 million to INR 20 million per quarter.

What are the targeted segments for which the term loan is very useful?

Term loan is basically designed for the manufacturers, retail/ wholesale traders and for the majority sections of the service providers.

What are the entities that can approach the Bank for the Term loan?

Here is the list of the entities that can approach the bank for the above said loan- • If you are a professional and self-employed individual. • Sole proprietors and proprietorship firms are most welcome. • Companies which are private limited. • For public limited companies there is a list of some selected companies and that too with the promoter holding greater than or equal to a 51 percent holding.

What is the maximum tenure of the Term Loan one can apply?

It basically depends on the amount of the cash flows with the customer and also the purpose of the term loan is of vital importance. Usually it varies between 5 to 15 years.

What are the different kinds of Term Loan which can be offered to the customer?

Term loan is basically of different kinds and its list includes- • Term loan for the acquisition of property. • Business expansion loan. • Purchase of fixed assets.

In order to eligible for Term Loan what is the minimum and maximum turnover range for its eligibility?

The minimum range of turnover requirement is INR 10 million and the maximum turnover requirement is INR 1,850 million.

At one time what is the maximum and minimum loan amount one can ask under the Term Loan?

It basically subject to the conditions but usually the minimum amount is Rs. 30 lakhs and the maximum amount is INR 750 million.

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 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.

ReviewsView All

Amit Roy

5 / 5

I have a small textile factory in Mumbai. I wanted to expand my business. Hence, I opted for Bajaj Finserv Business Loan. The processing was a bit longer with included lots of paperwork. But I am happy that they approved my loan without much hassle.
Malathi C.

5 / 5

I went with Bajaj Finance Business Loan when I was in need of funds for my small business. The interest rate charged was nominal as compared to the other lenders in the market. Got it within 20 working days.
Prasanna Ashok

5 / 5

I was searching for a business loan actively when I came across Finance Buddha. From here I applied for Axis Business Loan. Service was satisfactory and minimal paperwork was required. Executives were assigned to help me throughout the process. Overall happy with it.
Unable to Decide? Get in Touch with Us
query@financebuddha.com
+91

Learn How to Manage Your Money to Retire Wealthy!