Why do You Need a Business LoanOne cannot deny that initial investment is necessary and for anyone with a start-up plan it is pretty straightforward that starting a new venture requires a business loan so that the enterprise can stand and run smoothly. To earn money from a business first one needs to put money into it. The same rule applies even to the existing and profitable businesses as well. Every business needs to make use of business loans at one or other time for good reasons. One of them is the growth and expansion of the existing horizon of profit making.
Any business can apply for a business loan in Bhopal the following reasons:
- To purchase a land to set up business, offices or manufacturing plants
- A new business have to bear the expenses of license, registration, other paper-work and official formalities
- Businesses involved in manufacturing need to buy equipment and raw materials
- To meet the cost of maintenance of existing machinery or stuff
- To maintain and develop infrastructure
- Expenses related to purchasing or processing of raw materials
- To bear cost of transportation charges
- Working capital
- To achieve new or existing business goals
- Business expansion
Types of Business Loans in BhopalDepending upon the goals or the requirement of money for a specific task, business loans are classified into following categories.
- Term Loan: As indicated by the name itself, the loan is approved for a definite term. This type of loan can be secured or unsecured and the duration of the loan is thus decided accordingly. An unsecured loan is approved for a tenure of 1 to 5 years. On the other hand, the duration of a secured loan can lie between 15 to 20 years.
- Start-Up Loan: With sprouting ideas in mind, many people these days are coming up with innovative and society friendly business ideas. These ideas just need a little push, support from the society and some monetary assistance. Getting a start-up loan will require to furnish a business registration slip and recent credit history of the owner, or of the company if possible.
- Working Capital Loan: A working capital loan, most common business loan, helps in maintaining the cash flow and keeps the company running all the time. The working capital loan balances the company’s cash requirements when there is a cash shortage or during off-season. On the other hand, at the time of peak season, a working capital loan takes care of the cash flow to look-after every aspect of the business.
- Loan Against Property: A huge sum of money can be borrowed as a business loan by mortgaging any property for a particular duration. The mortgaged property should be free of litigation.
- Invoice Financing: No businesses should face any cash crunch due to a delay in payment from client post raising invoices. To tackle such situations we provide a loan on specified interest rates over the invoices. The loan against invoices can be paid off once the payment is received.
- Equipment Financing: Manufacturing businesses need to purchase new machinery and tools and also require maintenance of their available machinery. Equipment financing loans are generally ideal to care for these expenses. Equipment financing loans are generally preferred by manufacturers. It is generally inexpensive as well. But the equipment is taken as collateral along with other securities.
- Overdraft: An overdraft facility is sometimes available in lieu of collaterals or securities. Depending upon the credit history of the borrower organization, an overdraft limit is set. The applicant withdraws only the amount that is required and then pays interest only on the withdrawn amount from the overdraft.
- Merchant Cash Advance: The loan is approved based on the daily credits of the company. The applicant is asked to repay the loan on a daily basis. Depending upon how the business has performed on that particular day, one can choose to repay accordingly. A large amount can be paid back when the business has done really well or the repayment is low if the profits are scanty.
- Business Credit Card: This is not a preferred choice to get a business loan because of high interest rates. A business loan on a credit card can be taken for a short-term in case of immediate money requirement. One sometimes gets cashbacks or other offers on their cards when a business loan against the card is taken.
- Women Business Loan: Dedicated business loans for women entrepreneurs are offered by many financial institutions.
Eligibility Criteria to Apply for a Business LoanOne can get business loans in Bhopal at convenient interest rates. The loan processing is hassle free and convenient. We provide business loans to existing businesses and start-up ventures. However, the applicant needs to meet a certain eligibility criterion to borrow business loans.
- Age limit: The minimum age to apply for a business loan is 21 years while the maximum age of the applicant should not be more than 65 years.
- Business duration: The business needs to be in existence for at least 6 months prior to the loan application.
- Turnover of company: The business should have a minimum turnover of Rs. 90,000 in the last 3 months preceding the loan application.
- Exclusions: No business loans are offered to trusts, NGOs and charitable institutions.
- Small Business Administration (SBA) finance list: Any business located in a negative location or businesses excluded by the SBA finance are not eligible to get a business loan.
- A bank statement must be provided to apply for a business loan.
Documents Required to ApplyApplicants fulfilling the eligibility criteria for a business loan can get the loan approval easily just by submitting the required documents. A list of required documents for a business loan by individual businesses, LLCs, private limited companies, partnership firms or proprietorships is given below.
- Credit history that involves a bank statement of the last 12 months
- Address proof and identity proof of the applicant
- A valid business registration proof
- A business under partnership requires to furnish a partnership deed
- PAN card and Aadhar card for proprietor
- Non objection certificate from municipal corporation
- Identity card of the applicant.
- Income proof or a bank statement of the applicant for the last 2 years.
- Business ownership documents like proof of association with the business including sole proprietorship declaration, certified copies of memorandums, etc. need to be submitted by the applicant.
Features of Business LoanAvailing a business loan through Lendingkart in Bhopal comes with following features 1. Loan amount: The business loan amount can vary between Rs 50,000 to Rs 2 crores. The small and medium enterprises can apply for a desired amount to achieve their various business goals. The flexibility in loan amount is also ideal for start-ups. 2. Rate of Interest: Minimal interest rates are offered to the client to make their experience a profitable one. Interest rates are tabulated below
3. Loan Processing Time: We offer a fast document verification process. The loan sanction and disbursement are even quicker. The disbursals of the sanctioned loan amount is carried out within 3 working days once the loan is approved.
4. Tenure: One can repay loan on monthly or bi-annual modes. The applicant is given optimum time to repay the borrowed amount. The time duration for different types of loan is tabulated below
5. Collateral: No collaterals are required if the borrower meets all the eligibility criteria and is able to submit the required documents.
6. Loan processing charges: No hidden costs are there in the process of the business loan. We offer loan processing at a standard fee which ranges between 1 to 2 percent of the sanctioned loan amount. No pre-closure charges are applicable. The applicant repay the loan even before the tenure without any additional charges at any given point of time.
7. Extension of loan duration: An extension on the tenure can be given for upto a period of 6 months as per the guidelines.
Easy documentation, quick money disbursal, no collaterals and flexible tenures makes LendingKart an easy and flexible option to borrow money for your businesses.