Here’s How to Secure Collateral-free Working Capital Loan up to ₹ 1 Crore

Small business loans are both hard and easy to get. If your business has a verifiable history and you adhere to the tax and policy guidelines laid by the government, then it is easy to secure a business loan. And if, your papers are out of order, then it is a little harder to get one. Still, small business owners who are careful in managing their income and expenditure, and regularly pay due tax, can also find it hard to secure institutional finance in the current economic environment.

The banking sector in India is facing an unprecedented rise in non-performing assets a.k.a. NPAs. This has put pressure on most public and private sector banks to lend prudently. While the additional measures of scrutiny are the need of the hour, they are definitely affecting the investment environment in the country. Also, since the Indian economy is the fastest growing major economy in the world at the moment, a lack of investment doesn’t bode well for small and medium enterprises which contribute over 45% to the GDP growth.

Fortunately, the alternate finance industry has taken the mantle for providing working capital finance for SMEs of India. Non-banking financial companies like Lendingkart Finance are leading traditional banks in terms of funding and nurturing SMEs. There are several benefits of FinTech finance as it is popularly known because of its reliance on Big Data and Internet of Things.

Faster Business Loans: FinTech companies like Lendingkart are offering small business loans with a minimum turnaround time of 72 hours. This has been made possible by switching to online application, documentation and verification of loan requirements. Since, the government has also emphasized digitization in its schemes and policies, it has become easier to verify most of the financial information online.

Unsecured Business Loans: NBFCs are not only offering business loans faster but are also offering them without any collateral i.e. putting an asset up as security for the loan amount. Thus, removing one of the biggest problems faced by small and medium enterprises when applying for a business loan.

Lower Interest Rates: By eliminating manual work hours in loan processing, NBFCs are saving more in terms of operational costs. The benefits of which are then passed on to the borrowers in form of lowered interest rates on small business loans. With a good credit score and healthy balance sheet you can secure a business loan at half the rate of private money lenders.

Flexible Monthly Installments: NBFC loans are also quite business friendly as they offer multiple repayment options in comparison to bank loans which have fixed EMI schedules. For example, Lendingkart Finance gives you an option to repay your business loan in bi-weekly or monthly installments. So, if you are confident of generating revenues faster, you can also repay your loan faster. Otherwise, you can opt for a more relaxed repayment plan.

Waiver of Fees and Charges: Another benefit of FinTech business loans being online is that you pay minimal processing charges. Lendingkart has a processing fee of just 2% to 4% (depending on sanctioned loan amount), which is several notches lower than that of a bank. Furthermore, NBFCs are also waving of prepayment charges / penalties if you decide to repay your loan early.

Renewable Business Loans: A huge benefit of taking a small business loan from an NBFC like Lendingkart is that you can easily renew your sanctioned loan amount upon repayment. So, it is a kind of revolving finance facility that you are getting for managing your working capital.

Credit Score Improvement: Last but not the least, NBFCs also report your transactions to the credit rating agencies, which in turn helps in raising your credit score. So, by getting a small ticket business loan from an NBFC, you are inadvertently opening the doors to larger financial investments for your SME.

Applying for a Business Loan with Lendingkart

Lendingkart is one of the leading business loan providers in India, offering short-term working capital finance up to ₹ 1 crore for SMEs. To get a business loan you simply need to follow the following steps.

Getting your Documents in Order: Before applying for a business loan with Lendingkart, make sure that you have the digital copies of following documents handy.

  • Business registration / incorporation certificate and Company PAN Card
  • Bank account statements of all business-related accounts for the past 1 year
  • Personal / partner / director identification such as Aadhar and PAN Card

Assessing your Loan Requirements: Another thing to keep in mind when applying for a business loan with Lendingkart is that you should do a realistic analysis of your financial needs. Applying for an overly ambitious loan amount may see your application rejected whereas under applying may not fulfill the purpose for which you are taking a business loan.

Improving your Credit Rating: This is a one-off step for companies with a less than ideal credit rating. We recommend that you take steps to improve your credit rating by repaying existing debt and streamlining your finances before applying for a business loan to get the maximum benefit in terms of loan amount sanction and interest rates.

Now that you are ready to apply for a business loan, head over to the Lendingkart website or download the Lendingkart app on your Android or iOS smartphone to create a free loan account. The process for application is fairly straightforward, fill in your business details, loan requirements and upload the aforementioned documents to get an instant business loan quote. The quoted loan amount can be equal to or slightly lower than the requirement you share with us. Choose to accept the loan offer and Lendingkart will start the verification process.

You can easily track your loan application status from your Lendingkart loan account online. If all things check out, Lendingkart will credit the funds to your business account within 3 days of application.

For securing a quick, collateral-free working capital loan from Lendingkart.

Aadhaar and Business Loans – How They are Connected

Aadhaar and Business Loans – How They are Connected

Aadhaar Card has become one of the most important personal identification document of our time. The government issued ID is regulated by the Aadhaar Act and managed by the Unique Identification Authority of India. Here are some steps taken by the government to make Aadhaar an integral part of the Indian financial system.

  • Mandatory linking of Aadhar number to personal and business bank accounts.
  • Mandatory linking of Aadhar number to the Permanent Account Number (PAN).
  • Mandatory linking of Aadhar number to mobile numbers.
  • Linking Aadhar number with LPG Connection, Ration Card and Voter ID.

The deep integration of Aadhar number with other financial and identification services means that the Aadhar Card has become a one-for-all KYC document. An Aadhar Card contains your official name, date of birth and registered residential address, plus it is linked to your verified mobile number – all of which are details sought by financial institutions when verifying a loan application. When you link all your documents with your Aadhaar number, it becomes very easy for lenders to verify your personal and financial details. This in turn facilitates faster business loan approvals when you submit Aadhar as a KYC document.

Today, you can get a business loan online in India by submitting only a few essential documents, such as your Aadhar Card, Business Registration Certificate, Business Account Statements and Tax Compliance Certificate. Moreover, Non-Banking Financial Institutions such as Lendingkart Finance, offer business loan interest rates which are more flexible than commercial bank rates.

Lendingkart also promises loan amount disbursal within 3 days of document verification, which is incredibly faster than getting a business loan from a bank. To get a Lendingkart Business Loan you have to simply sign-up for a free-account and provide a few details about your business. Lendingkart loan amount calculator and business loan interest rate calculator will then process your details and offer a custom business loan amount, just for you.

Once you confirm the amount, your business loan application will be processed pending document verification. You can simply upload digital copies of your documents in your account and track the entire business loan application online.

Link your Aadhaar to your bank accounts and mobile numbers today, the deadline for doing so has been extended beyond March 31, 2018 for an indefinite period. But the linking is still mandatory and comes with its own benefits.

To apply for a business loan with Lendingkart, click here.

Difference between Working Capital and Startup Loans

Online Lenders – The Better Choice

Small businesses are increasingly moving towards online business loans and finance options for expanding their operations. Online lenders offer several benefits over financing from commercial banks, such as Flexi EMIs and quick short-ticket finance. This has made these non-banking financial institutions the choice of modern MSMEs.

For example, today, non-banking financial companies like Lendingkart Finance are disbursing working capital loans and unsecured business loans across the country whereas banks are limiting their commercial lending activities.

Here are the reasons why you should apply for a business loan from an NBFC –

Quick Turnaround Time

The one element that defines importance of finance is its timely availability. If you fail to get the requisite funds within the time frame available to you, either the opportunity will be lost or the same activity will cost you more.

Since a majority of small business owners are applying with them, banks take their own time in scrutinizing business loan applications. Thus, the process of loan approvals is slow. NBFCs, on the other hand, specifically cater to the MSME finance. Therefore, they are prompt in completing documentation, verification and disbursals.

E.g., Lendingkart Finance promises loan amount disbursal within 72 hours of documentation.

Completely Online Process

The reason why an NBFC like Lendingkart can approve loans faster is the online only loan application process of the company.

Every modern business has access to digital copies of requisite loan verification documents such as PAN, Aadhar Card, Bank Statements and ITR Certifications. An online lender can thus quickly verify the statutory status of your enterprise and disburse loans where traditional banks continue to struggle with filing and manual paperwork.

Minimal Documentation Required

In an online process, the lender can verify your business and personal information through government’s online portals, hence there is no need for excessive paperwork and documents to be submitted. For example, Lendingkart offers business loans by verifying only the essential documents for identity, address, incorporation and tax compliance of your enterprise.

Flexible Payments and More

The completely online business loan process allows lenders to cut costs associated with manual work, and they are more than happy to pass you the benefits. So, expect lower business loan interest rates, flexible EMI options and reduced processing charges when you get a business loan from an online lender like Lendingkart Finance.

If you are planning a business expansion soon or want to streamline your daily operations with a working capital loan, visit our website; www.lendingkart.com, and sign up for a quick quote.

Why Online Lenders are a Better Choice

Online Lenders – The Better Choice

Small businesses are increasingly moving towards online business loans and finance options for expanding their operations. Online lenders offer several benefits over financing from commercial banks, such as Flexi EMIs and quick short-ticket finance. This has made these non-banking financial institutions the choice of modern MSMEs.

For example, today, non-banking financial companies like Lendingkart Finance are disbursing working capital loans and unsecured business loans across the country whereas banks are limiting their commercial lending activities.

Here are the reasons why you should apply for a business loan from an NBFC –

Quick Turnaround Time

The one element that defines importance of finance is its timely availability. If you fail to get the requisite funds within the time frame available to you, either the opportunity will be lost or the same activity will cost you more.

Since a majority of small business owners are applying with them, banks take their own time in scrutinizing business loan applications. Thus, the process of loan approvals is slow. NBFCs, on the other hand, specifically cater to the MSME finance. Therefore, they are prompt in completing documentation, verification and disbursals.

E.g., Lendingkart Finance promises loan amount disbursal within 72 hours of documentation.

Completely Online Process

The reason why an NBFC like Lendingkart can approve loans faster is the online only loan application process of the company.

Every modern business has access to digital copies of requisite loan verification documents such as PAN, Aadhar Card, Bank Statements and ITR Certifications. An online lender can thus quickly verify the statutory status of your enterprise and disburse loans where traditional banks continue to struggle with filing and manual paperwork.

Minimal Documentation Required

In an online process, the lender can verify your business and personal information through government’s online portals, hence there is no need for excessive paperwork and documents to be submitted. For example, Lendingkart offers business loans by verifying only the essential documents for identity, address, incorporation and tax compliance of your enterprise.

Flexible Payments and More

The completely online business loan process allows lenders to cut costs associated with manual work, and they are more than happy to pass you the benefits. So, expect lower business loan interest rates, flexible EMI options and reduced processing charges when you get a business loan from an online lender like Lendingkart Finance.

If you are planning a business expansion soon or want to streamline your daily operations with a working capital loan, visit our website; www.lendingkart.com, and sign up for a quick quote.

KYC Documents – What You Have and What is Needed

Getting a business loan in India requires a lot of meticulous planning on a small business owner’s part. One aspect of this planning is getting the KYC documents in order. Here we have compiled a list of documents that you generally need when applying for a business loan.

A Checklist of Documents Required to Apply for Business Loans

  • For Identity Proof: Driving License / PAN Card / Passport / Voters ID Card
  • For Address Proof: Utility Bills (telephone, electricity, broadband) / Passport / Trade License / Rental Agreement / GST Certificate
  • For Financial Checks:Business related bank statements(generally, of preceding 2 years)
  • For Tax Compliance: Latest ITR (you may also be asked for the computation of Balance Sheet, income & Profit & Loss account for the last 2 years)
  • A Proof of Continuation
  • Other mandatory documents include, Sole Proprietorship Declaration, Certified Copy of Memorandum & Articles of Association
  • Audited financials for the last 3 years

Furthermore, the Business Loan Application Form is a mandatory document which is to be filled when applying for a loan with a bank.
However, if you apply for a loan with a non-banking financial company such as Lendingkart Finance, you can get a business loan approval without having to submit copies upon copies of your KYC documents. Simply register on the Lendingkart website or use the Lendingkart app on your smartphone to submit your business loan application.

The process offered by Lendingkart Finance is completely online, where you are required to submit minimal documentation.For example, when applying for a Lendingkart business loan, simply upload the following digital copies –

  • Proof of Registration
  • Any one of photo KYC documents
  • ITR Statement
  • Bank and GST statements

A Lendingkart business loan allows you to maintain the cash flow, upgrade business facilities and equipment and invest in business expansion. Lendingkart offers customised interest rates and flexible EMI options to make it easy for you to grow your MSME.

Visit us at www.lendingkart.com to know more.

Demystifying MSME Loans

MSME Loans – Risky and Profitable Business Types

Micro, Small and Medium Enterprises are the largest employment providers in India. Their contribution to overall employment in the country is pegged at 69%. Also, the MSME sector is responsible for almost 45% of the manufacturing industry and drive 40% of our total exports. These are significant numbers, and therefore, the growth of MSMEs has been a priority of successive Indian governments.

However, for growth, the MSMEs need investment, and the readily available source of investment to them is a business loan. Banks and commercial institutions called non-banking finance companies (NBFCs) are the two main providers of business credit for MSMEs in India. An average Indian MSME needs to pass a number of financial litmus tests before it can get an unsecured business loan or a working capital loan.

Financial institutions give priority to businesses which are considered risk-free and profitable. While it can be argued that every business can be prone to risks, there are a few benchmarks which can assuage the lender’s apprehensions.

A Registered Entity

A registered business entity which complies with the laws of the land establishes a trust in your company on the lender’s part. On the other hand, when a business lacks the necessary statutory paperwork, a lender is right to be apprehensive.

Therefore, getting a business registration will not only get you faster loan approvals, but will also remove any doubts about the legitimacy of your enterprise.

Age of Business

The second factor that distinguishes between a risky and profitable business is its age. While a short-term business idea can also be profitable, the lenders usually require at least 6 months of performance reports before sanctioning a business loan or line of credit.

If you are seeking an MSME loan, then it is better to apply for a loan after completing 6 months or more of operations. Another reason to that is because financial institutions place limits on the period within which you can reapply for a loan. For instance, if you are 5 months into the business and your loan application gets rejected, a lender policy may dictate that you can only apply again after 3 months.

That is another reason why you should never apply for multiple loans from multiple lenders at a time.

Credit History and Profitability

The bank or NBFC that provides unsecured business loans will scrutinize your business account statements to assess the risk or profitability of your venture. If you are unable to maintain a consistent cash flow and retain enough cash at bank to meet your liabilities, the lender will put you in the risky category. In case you are making a good profit, the lender will readily offer loan terms.

Also, if you have a steady cash flow and cash at bank but are not repaying your existing loans on time, it will reflect in your business credit history. Such behavior will lower your credit score and increase the risk factor in a lender’s reckoning.

Type of Business

There are certain types of businesses which are considered risky from an investment point of view. For example, dealing in real-estate, jewelry, precious metals, arms and ammunition, crackers, and other perishable goods involve a high risk-to-return ratio and therefore, given lower preference by a lending firm or bank.

If your business falls into the high-risk category, make sure that you have a solid financial report card to get a business loan.

Getting an MSME Loan for your business

A non-banking financial company is more likely to offer better loan terms for a business because of its in-depth scrutiny and flexible policies towards MSMEs. Lendingkart, a leading NBFC lender in India, offers business loans with customized interest rates along with a flexible EMI schedule.

To know more, visit www.lendingkart.com

 

EMI Calculators and Business Loans – Facts and Myths

EMI Calculators and Loans – Facts and Myths

When you search the internet for getting a small business loan for your enterprise, a number of business loan EMI calculators and loan offerings pop up in your search results. For a person applying for their first commercial loan, it might get confusing. This post helps you in understanding the formula used by an online EMI calculator to calculate the monthly instalment for your MSME loan. Furthermore, we try to dispel some common myths associated with business loans.

How EMI Calculators Work?

EMI means Equated Monthly Instalment. It is basically the amount you pay every month until the loan is paid in full to the lending institution. Every EMI has two components, principal and interest. Both components are paid off with every consecutive EMI payment.

Here is the formula used for calculating an EMI –

emi calculators formula

Using the formula, you can self determine your monthly EMI on a business loan. Lending institutions such as banks and NBFCs charge a minimum processing fees and other charges for disbursal which are generally deducted from your total loan amount.

Benefits of Business Loans

Unsecured business loans let businesses fund their exigencies and can be used for expansion or to meet working capital requirements. Also, unsecured business loans are one of the quickest ways to raise liquid capital without putting up a collateral or security.

NBFCs such as Lendingkart offer quick renewal of loans upon repayment without any extra charge, which means you can easily maintain your working capital in-flow indefinitely.

Myths Associated with Small Business Loans

There are several rumours and myths that float around the web and in business circles about getting a business loan from an NBFC or banks. However, not everything you see or hear online is true.

Myth 1: Getting a business is the hardest thing to do

Obtaining a business loan is not an insurmountable task. You can reduce a lot of frustration by doing some due diligence before applying for a small business loan. With your documents and eligibility requirements in order, you can easily get an unsecured business loan from an NBFC or a bank.

Lendingkart promises loan amount disbursals within 3 days of document verification. What’s more? The process is completely online. You can simply login on the Lendingkart website or mobile app to apply for a business loan.

Myth 2: A Perfect Credit Score is Required for Getting a Business Loan

While your CIBIL score will be taken into account by the lending agency, it does not have to be perfect. A good CIBIL score that is more than 700 is mostly enough to qualify for a business loan. There are a number of other factors such as your business’s health, years of operation and profit margins, which are considered by the lenders.

Myth 3: The Best Way for Getting a Business Loan is Through a Bank

Well, this is no longer true because banks have a very narrow product portfolio considering the flexible credit requirements of modern MSMEs. Therefore, Non Banking Financial Companies are a much better choice for availing quick working capital loans and unsecured business loans.

Along with fast processing times for MSME loans, NBFCs also offer the ease of renewal and waiver of pre-closure charges.

Concluding Thoughts

As the digital reforms to our economy take off, getting online finance for business is going to become even more easier. At Lendingkart, we have already limited the process of getting business loans to a few simple steps. You can use our online EMI calculator to plan and manage your monthly instalments as well.

To apply for a business loan, click here.

Lendingkart offers Attractive Interest Rates for SME Loans

Small and medium enterprises in India are growing at an exponential rate. The Indian Government has launched several schemes for their benefit. Furthermore, the introduction of GST and online portals has increased the ease of doing business in India. You can now quickly gain approvals for new projects or much needed expansions. However, to get things started you will need ready capital for investment, and at Lendingkart Finance, we do just that for you. Lendingkart offers attractive interest rates in the range of 18-27% for short term SME loans.

With Lendingkart’s unsecured business loans, you can get small-ticket short term investment on-the-go. We have made the process completely online so that you can monitor the progress of your application in real-time. Lendingkart loans are approved for businesses having profitability in 2 previous financial years with a minimum annual turnover of Rs. 6,00,000. Other factors such as applicant’s age, income tax returns, and business stability are also used in determining the loan eligibility.

Easily Calculate Your EMIs

We offer a business loan EMI calculator which you can use to get an idea of EMI amounts you will be paying. The EMI is calculated based on the Lendingkart interest rate offered to you, the loan amount and tenure. For example, the EMI payable for a one lakh rupee loan, taken for 12-months at 18% interest per annum, will be Rs. 9,168. In similar scenario, if the interest rate is 27% p.a., then the EMI will be Rs. 9,602.

Attractive interest rates for SME loans. Find yours through the EMI Calculator

 

Needless to say, the higher the amount of your loan, the higher the amount of your EMI. The EMI calculator also helps you in budgeting and adjusting your finances to meet your EMI payment schedules.

The benefits of taking a business loan from Lendingkart

There are several benefits offered by Lendingkart in comparison to banks providing similar loans.

Lendingkart Interest Rates:

Applying for an SME Loan

Terms

Attractive Interest Rate 18% to 27%*
One time Processing Charge 2% of the Loan amount
Loan Duration Minimum: 1 month, Maximum: 1 year
Loan Amount (min to max.) Rs. 50,000 to 1 Crore
Part Prepayment Charges NA
Pre-closure Charges Nil**

*based on your business’s health and credit score

**Pre-closures are only allowed after the first EMI has been paid in full

We have a proprietary method of calculating interest rates which evaluates your loan application using advanced analytics. By enabling technical inputs and outputs we have made the process of calculating interest rates faster and more accurate. The attractive interest rates are calculated by factoring in several things listed below and are different for every partner SME.

  1. Loan Amount: The amount that you apply for, pending approval, counts towards deciding the interest rate. Generally, the higher the amount of loan, higher the possibility of a lesser interest rate from Lendingkart.
  2. CIBIL Ranking: If your CIBIL score and history are good, the interest rate we charge will be lower and vice versa.
  3. Balance Sheet: If you are earning good margins, we will take that in consideration while deciding interest rates on your loan.
  4. Age of Business: For long running enterprises, we offer special discounted SME loan rates.

Business Friendly Loan Approval and Pre-closure Charges

We do not believe in charging extraneous charges and fees from our customers. That’s why we have one of the friendliest pre-closure policies – there are no pre-closure charges. After paying the first EMI, you can prepay the full loan amount, anytime. Added with the benefit of attractive interest rates, it is a great way to finance any short term business requirement.

Also, we only charge 2% of the loan amount plus service tax as processing fee. It’s a one-time fee which you don’t have to pay if you choose to reapply for the same loan amount upon closing.

Minimum documentation and turnaround time

When applying for a business loan with Lendingkart, you have to submit only a handful of documents. And we process every loan application within 3 days of document verification.

Documents required by us are:

  1. Address proof (Aadhar Card, Voter ID, Bank Statement, Proof of registration, etc.)
  2. Identity Proof (Passport, Aadhar Card, Driving Licence, PAN, etc.)
  3. Proof of Business (PAN, GST Registration, Trade License, Registration Certificate issued by RBI or SEBI).
  4. Copy of PAN card and Income Tax Returns for last 24 months.
  5. Bank Statement of last 12 months.

To know more about applying for a business loan with Lendingkart, head over to our website and sign-up for a free account.