Business Loan in Noida

Noida is a city in Uttar Pradesh which is part of the Non Capital Region of Delhi. Noida has emerged as a major residential and commercial centre with many housing projects and corporate offices in the area.

Noida is often considered as an extension of the capital, New Delhi. It is a fully planned city which has overseen rapid growth in infrastructure, becoming a hub for media-houses and the entertainment sector.

If you are looking for business loans in Noida due to expansion of business or procurement of plant & machinery, read on to know the eligibility and documentations required.

What is a Business Loan?

Business loans are the financial support offered by banks and NBFCs to businesses to help them meet their capital needs. Business loans can be used for scaling a new business or for kick-starting a new venture all together.

Business loans fulfil production and expansion goals of a business by providing them with the capital to do so. Business loans are provided by banks and Non-Banking Financial Institutions (NBFCs) online as well as offline through a branch office.

Business loans can be segregated into two major types:

1. Secured loans

Secured loans are the sum of money which are borrowed by pledging a collateral to the lender.

2. Unsecured loans

Unsecured loans are sums borrowed by an individual without any need for a collateral. The rate of interest of unsecured loans is higher than that of secured loans.

Business loans are becoming increasingly customized to meet the specific needs of different businesses.

Though the loan amount, tenure and interest may vary as per the business, they tend to be more or less as follows:

Business loan eligibility:

A business has to meet certain requirements before it is eligible for a business loan.

Although different lenders have different eligibility criteria, business loans are offered to enterprises with a good turnover and CIBIL score.

The applicant has to submit some documents which prove that his/her business is performing well and running in profits. Based on these documents, the lender decides the loan amount, tenure and interest rate.

These are some of the general criteria’s that lenders take into account:

1. Eligible entities

Business loans can be obtained by self-employed individuals, sole proprietors, limited liability partnerships, and partnership firms, public and private limited companies, MSMEs, NGPs and Co-operative societies.

2. Applicant age

The age of the applicant should be minimum 21 years during application and not more than 65 years during maturity of loan.

3. Credit history

The applicant should have a good credit history and a CIBIL score of over 650.

4. Resident

The applicant should be an Indian citizen.

5. Business vintage and performance

The business should be in running for the past 2 years continuously with profits and should not be in any kind of debt.

6. Annual turnover

The annual turnover of the business will be decided by the lender.

Interest Rate

14.99% onwards

Loan amount

Rs. 1 crore

Repayment tenure

12 months to 60 months

Collateral

Not required (except loans on machinery)

Age

Minimum: 21 years, Max: 65 years

Why take business loans?

Business loans help enterprises to meet their goals and financial requirements for day-to-day operations.

Business loans maybe beneficial to a business in the following ways:

  1. Business growth: Businesses need to scale up after a certain point. But for expansion, it needs the capital to do so. This is where business loans can help SMEs scale-up their production capacity or business presence.
  2. Increase working capital: Many businesses may also fall short of funds to carry out their day-to-day operations. A business loan is a viable option to source funds for the smooth functioning of your business.
  3. Purchase of equipment: Plants and machineries depreciate in value every year. After many years, it may hamper production or increase its price. Therefore, it is necessary to upgrade your machinery after every 10 years or so and install new ones that improve efficiency. Business loans can help you with upgrading your plant and machinery.
  4. Purchasing inventory: Sudden market fluctuations may see prices of raw materials rise, which can be inconvenient for businesses who require urgent materials for production to meet the increased demand. Business loans are a viable option in such circumstances.
  5. Improving credit history: A business loan also improves the credit history of the business with consistent and on-time payments.

Documents required to apply for a business loan

Following are the documents required to apply for a business loan:

  1. Passport-size photographs
  2. KYC documents of partners, promoters, owners, etc.
  3. Business plan
  4. Identity proof: Passport, PAN card, Voter ID, Driving Licence
  5. Age proof: Voter ID
  6. Residential proof: Aadhar card, utility bills, ration card.
  7. Business Address Proof: Rent agreement, Sale Deed, Lease Documents
  8. Proof of business ownership: Registration and incorporation certificates, trade licences.
  9. Last 12 month’s bank statement 
  10. Tax invoices for the past 2 years
  11. Financial documents audited by a certified CA.

Business loans in Noida

Anyone can apply for business loans in Noida if they fulfil the eligibility laid down by the lender. One can avail a business loan from a bank or an NBFC.

Banks offer a lower rate of interest but have stringent criteria for business loan eligibility. NBFCs are more flexible with the eligibility and are more likely to disburse loans to individuals with relaxed criteria but charge a higher rate of interest.

These are some loans offered by lenders to businesses in Noida:

  1. Term loan
  2. MSME Loan
  3. Mudra Loan
  4. Working Capital Loan
  5. Letter of credit
  6. Invoice funding
  7. Micro lending
  8. Merchant cash advance
  9. Small Business Finance

Steps to apply for a business loan

Online:

  1. Visit official the website of the lender
  2. Select your preferred business loan
  3. Download the application form and fill in the details
  4. Submit the application form 
  5. The application will be verified by the lender
  6. If the loan is approved, the amount will be credited to the applicant’s account in 10-15 working days.

Offline:

  1. Visit the nearest branch of the lender
  2. Ask for the business loan application
  3. Fill in the details with the attested form and submit all required documents
  4. Lender will verify the information and documents
  5. Lender will disburse the loan amount if the applicant is found to be eligible.

Business loans in Noida FAQs:

1. What is a business loan?

Business loans are the financial support offered by banks and NBFCs to businesses to help them meet their capital needs. Business loans can be used for scaling a new business or for kick starting a new venture all together.

2. Who can get a business loan?

Business loans can be obtained by self-employed individuals, sole proprietors, limited liability partnerships, partnership firms, public and private limited companies, MSMEs, NGOs and Co-operative societies.

3. What are the options to pay back a business loan?

You can clear a loan by direct debit, post-dated cheques or electronic clearance services (ECS).

4. What are the rules for business loans?

Following is the eligibility criteria for availing a business loan:1. Applicants should be at least 21 years of age during loan application and not more than 65 years of age during maturity. 2. Applicants should be an Indian citizen. 3. Business should be in profit for the last 2 years. 4. Business should have a minimal annual income of Rs. 1.5 lakh per annum.

5. How much loan can my business get?

Amount of business loans depends on your business's creditworthiness, annual revenue and prevalent debts. Ideally, lenders approve a loan amount of 10-30% of the business's annual revenue.

6. What should be the minimum CIBIL score for a business loan?

As a general rule, banks grant business loans to individuals with a minimum CIBIL score of 650. However, NBFCs grant loans to individuals with a lower CIBIL score than 650, if they are convinced of their ability to repay the amount.

7. How can I calculate EMI for my business loan?

You can easily calculate EMI for your business loan using the EMI calculator online. Most lenders have EMI calculators on their website for applicants to have a fair knowledge of the true cost of a loan.

8. Can I get a business loan without providing any collateral?

Yes, you can avail an unsecured business loan that does not require any collateral to be pledged. However, interest rates for unsecured business loans are higher.

9. What is the rate of interest for unsecured business loans higher?

The rate of interest for unsecured business loans is higher because it involves a greater risk of loan default.

10. What is the average rate of interest for business loans?

You can get a business loan with a minimum of 14% interest.