Business loans help in paying expenses like employee salaries, office supplies, office building rents, and other costs up until your business gets off the ground or receives investment. They are loans designed for businesses to cover expenses. Today, India’s banks and non-banking financial institutions provide business loans with low interest rates, flexible payment terms, and several other advantages that benefit all types of firms. Even business loans for women are applying and they are met with faster approval and disbursement.
However, you must have a detailed plan of your company and how you intend to use the loan money before asking for the loan; most lenders require it. Your idea of starting a prosperous company that operates nationally or internationally has probably been on your mind for a while. We hope this blog will assist you in understanding the requirements for business loans and the paperwork required. Let’s first discuss the many kinds of company loans you can obtain.
The requirements you must meet to be eligible for a business loan
For the most part, the qualifying requirements for business loans are the same for banks and other lenders like NBFCs. However, depending on the lender, there can be a few more ones here and there. The most typical eligibility for business loan requirements are listed below.
Age of the Applicant: The applicant’s age must be at least 18 years old. The maximum age varies depending on the lender.
Nationality: The candidate must be an Indian national. The applicant must be completely free of any criminal history.
Credit Score: A credit score is a crucial qualification factor for small company loans. A 700 or higher is regarded as excellent. Additionally, the applicant must not have a history of loan defaults with any Indian banks or financial institutions.
Eligible: The company should be incorporated as a private, public, limited liability company, LLP, sole proprietorship, or partnership. A business loan is also available to individuals, SMEs, MSMEs, retailers, traders, and manufacturers who only work in the services, trading, and manufacturing sectors.
ELIGIBILITY FOR START-UP BUSINESS LOANS: DOCUMENTS REQUIRED
The following are the documents needed to apply for a business loan in India:
- properly completed loan application.
- photos the size of a passport.
- a thorough, independently written business plan.
- AADHAR Card, PAN Card, passport, utility bills, and other KYC documents The KYC documents of each partner are required if the startup is a partnership.
- ITR and most recent 12-month bank statements.
In addition to these, depending on their requirements or policies, your lender may or may not want a few additional documents. The eligibility for a business loan is also determined by the business’s age, type, turnover, creditworthiness, supplemental revenue source, and other factors. Before requesting a loan, be sure to carefully read the terms and conditions set forth by your lender.
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