Business Loan

To start any business or to carry on the functionality of the existing business one needs funds. But the question arises from where you can get these funds. A business loan may be the answer to all such questions. What is a business loan? A business loan is something similar to personal loan, but it is specially designed to meet your business requirements and goals. With a business loan, you borrow a certain amount of money for a tenure, with interest rate and monthly repayment option are fixed with the term.

These loans can be secured as well as unsecured. Secured business loans generally have lower interest rates. Apart from a business loan a financial institution may have other kind of products like overdraft facilities to take care of the business needs of the individuals.

Who is eligible for business loan?
The business loan can be offered to any person who is running a legitimate business with a decent earning can apply for a business loan. Different banks have different criteria and terms to validate the authenticity of his/her business. After authentication and validation, banks have the sole authority to decide the amount of loan and even whether it wants to offer the loan to borrower or not. Below are some points which are generally considered before offering a loan:

1. Type of the business: Proprietorship, Partnership, Pvt.Ltd. or Public Ltd.
2. Turnover of the business.
3. Profit of the business.
4. Cash flow of the business.
5. Track record and type of business.

How much Business loan I can get
The business loans are offered on the basis of the profit and numbers of years you are running this business. It also depends upon cash flow and other aspects related to revenue generation. After considering all the major factors, banks come out with eligibility of the loan amount if can offer to any business. The key criteria for approval of any business loan is how profitable the business is and how the borrower will manage to repay the EMIs with other liabilities and expenditures of the company.

From where I can get a business loan.
There are many banks which can offer a business loan to eligible business owners.

The list as follows:

1. HDFC Bank
2. ING Vysya Bank
3. Bajaj Finserv
4. ICICI Bank
5. Standard Chartered Bank
6. Fullerton India
7. RBL Bank

All Bank Business Loan Interest Rates Mar 2020

Bank	Interest Rates	Processing Fees	Tenure	Disbursal Time
HDFC BANK	15% - 19%	2.49%	12-36months	4-Working Days
ICICI BANK	16%-22%	2.00%	12-36months	5-Working Days
TATA Capital	18%-24%	2.50%	12-36months	5-Working Days
BAJAJ FINSERV	19%-23%	Upto 3.00%	12-60months	2-Working Days
YES BANK	15.5%-21%	2.00%	12-60months	5-Working Days
RBL BANK	19%-26%	2.50%	12-36months	5-Working Days
Fullerton India	22%- 29%	3.00%	12-36months	7-Working Days
Capital First	18%-25%	3.00%	12-48months	4 to 5-Working Days
Aditya Birla	20%-26%	2.00%	12-36months	3-Working Days
Kotak Bank	18%-23%	2.50%	12-36months	7-Working Days

What is the best way to compare business loan?
Compare the below three things before applying for any business loan:

1. Per month's EMI
2. Processing Fee
3. Prepayment charges

If You want to pay the loan in the tenure, the sum of 1&2, whichever is lowest, take the loan from that Bank.
If you think you might have cash flow and can pay earlier, then also check the prepayment charges.

Documents Required for business loan.

1. ID Proof
2. Address Proof
3. Proof of Continuity Of Business
4. Bank statements of last six months.
5. Board Resolution (If Pvt. Ltd. Co. is co-borrower/Partnership Authorization Letter {if partnership firm is co-borrower}
6. ITR & Statement Of Computation of Income - for last 2 Years
7. CA Certified or Audited P/L Acc Statement and for >40 Lacs cases Audit report along with schedules of P&L and Balance Sheet - for last 2 years
8. Latest ITR of Co-Applicants - For last 2 Years
9. Ownership Proof of Residence or Office