Let’s start with the basics.
So, What Exactly is a Commercial Loan?
A loan provided to a business by a financial institution such as a bank or a lending company is known as a commercial loan. It is used to cover capital expenses or operational costs, which the company otherwise wouldn’t be able to afford.
Due to high upfront costs and some regulatory hurdles, small businesses are often prevented from having direct access to equity and bond markets for financing. This often leaves smaller businesses to rely on lending products such as unsecured loans, a line of credit, or term loans.
Why the need for Commercial Loans?
Small businesses who have already built a strong footing in the market can now move on to the next stage, which is an expansion of the business. With an established business model and good transactional history in place, one can utilise a commercial loan to expand the business. Small business owners can also look at the possibility of expanding across geographical locations or a new target audience.
- Equipment and tools
Science and technology are changing every day. The quality, overall output and productivity of a business can be enhanced greatly with the newer technologies and tools. Small business owners can take advantage of commercial loans to invest in new technology that would give them a competitive advantage.
Read More: Machinery Loan for Business
- Inventory management
Sometimes, small business owners hesitate to take up big orders. Big orders mean having enough raw materials which are available in a ready-to-use state. Commercial loans can come in handy here. Small business owners can avail of commercial loans to buy the necessary inventory much ahead of time.
- Increase working capital
The cornerstone of any successful business be it micro, small, medium or large is to have healthy working capital. It is critical for a business to have healthy working capital to survive. Unforeseen payment delays by customers can be avoided if a commercial loan is availed to balance out the adverse financial implications.
- Consolidate Debts
Small business owners can consolidate all their smaller debts into one single EMI. This not just reduces the strain on your monthly budget but also helps in keeping track of your debts. There is also an option to expand your repayment schedule for up to 12 months, which means that the chances of you reducing your monthly EMI amount are high.
How do I know if I am Eligible for a Commercial Loan?
If you can fulfil all the below requirements, you are all prepared to apply for a commercial loan.
- The business must be in operations for more than six
- The minimum turnover of Rs. 90,000 or more should be fulfilled three months before submitting your loan application.
- The business should not be in the list of negative location.
- The only businesses that are not eligible for commercial loans are trusts, NGOs and charitable institutions.
Contact us in case your business falls under the restricted category or location, to confirm if you are eligible.
What all documentation would you need to submit while applying for a commercial loan?
Here’s a list of documentation you would need to submit while applying for a commercial loan. We, at Lendingkart, believe in sticking to the bare essentials to process a commercial loan.
Pvt. Ltd. / LLC / One Person Company
Bank statement of 12 months
Proof of business registration
PAN Card Copy of Proprietor(s)
Aadhar Card Copy of Pre-closProprietor(s)
Copy of Partnership Deed
Copy of Company PAN Card
We accept any of the following as a Business registration proof
- GST filing
- Trade License
- Business Registration Certificate
- Drug License
- VAT registration
What would be the fees?
The fees that you would have to pay once your loan is approved by us are shown in the taken below:
Between 15% and 27%
One-time processing fee
Up to 2 years
> Rs. 90,000 turnover for 3 Months
Rs. 50,000 – Rs. 2 crores
Monthly or Bi-weekly
*Based on the health of your business, revenues and an annual turnover.
**Pre-closures are only allowed after the first EMI is paid in full.
What are the benefits of taking a loan from Lendingkart?
Small business commercial loans from us help you in growing your business to its full potentiality. Here are some of the benefits of letting us help you with your financial restraints:
- Shorter waiting period
We understand the severity of your situation. Every application received by us is taken on priority. Instead of waiting around for weeks, we give you our decision within days. You can change your dreams into reality within days be it in product marketing, buying new equipment or undertaking large orders.
- Increased profits for your company
There is no fixed reason for you to utilise commercial loan money. You can open a new plant, streamline your working capital or even upgrade to new technology at your plant. We are here to help you balance the capital of your company through short-term investments that can be flexibly repaid.
- You remain a boss
We at Lendingkart offer unsecured business loans such that your assets are protected in case there is a loan default. However, we encourage you not to default as it may hamper your credit score. Thus, taking a loan from us keeps you the boss at all times.
- Repayment options
There is no fixed tenure to repay your loan. You can pay monthly or bi-weekly. However, you can even repay the entire loan amount earlier if you have extremely good sales and have earned a good profit.
- Shorter disbursal time:
You don’t have to wait for weeks for the amount to be credited into your account; we take a maximum of 3-5 days as compared to the banks which take 8-10 days.
- Low-interest rates: We use big data analytics to determine interest rates. Every applicant is given a different interest rate.
You get to prove yourself to other creditors
With Lendingkart small business commercial loan, you can improve your profitability, which is like a domino effect. Once you increase your profitability, it will directly lead to credibility for your business in the market, which in turn will raise your business’s credit rate and pave your way to increase in investments and business finance.