Whether you have a business degree or not, whether you live in a metro or a non-metro city, all an entrepreneur needs is a business idea, passion and perseverance to start a new business. However, when it comes to expanding and sustaining your business, ready funds at the time of need are vital. Here is when business expansion loans can come to your rescue. Here’s how you can go about getting a business loan to help grow your business.
In today’s world having a stellar business idea is not unheard of, as can be seen from all the mushrooming startups across the country. What will set you apart however is having the right financial aid to grow, evolve and flourish in this highly competitive market. Having access to the right amount of capital at the right time is one of the most crucial things a young company needs. Lenders across India, be it banks or non banking financial institutions, offer various business loans for small businesses to cater to this need.
The very first step towards availing a business loan is knowing what you will use the funds for. As a small business owner, you should have a clear goal regarding how you will utilise the funds—whether it is to kick-start your new venture, helping sustain it or expand your business. Once your know how you will employ the funds, the next step is understanding your eligibility for a business loan. Let’s take a look at all the factors that play a vital role in determining your eligibility for a business loan.
To be considered eligible for a business loan you should be one of the following:
- A Limited or Private Limited Company
- A Partnership or Proprietorship Firm
- A Chartered Accountant or a Self Employed Professional such as a doctor
In addition to the above, the individual applying for the business loan should be at least 26 years of age.
The city from which you plan on operating as a base, the type of business and your minimum turnover also play an important role in getting the loan amount sanctioned.
If you’re wondering how to get a small business loan once you meet the eligibility criteria, here’s the next step: shopping for the right business loan for your business. Research is paramount here, and this is where you should spend the maximum amount of time. Find a lender who allows you flexible payment tenures, charges minimal interest and makes the process of applying for your business loan easy and convenient. Also pay attention to the application fees and other charges added to your business loan. Often, the application process is so complicated or rigorous that it can negatively impact your loan timeline in case you are in need of immediate funds. Knowing what you require during a business loan application and preparing for it in advance can often help you expedite the process.
Here are the common documents required for a business loan:
- Correctly filled out application form
- 1 photograph of the applicant
- Income Details such as IT returns, Balance sheet & P/L account statement for the last 2 years with Annexure, Form 16 A
- Bank account statements for the last 3 months
- KYC (Know Your Customer) documents of applicant
- Business vintage (usually for 5 years)
- Business Proof: Certificate of practice
In case you’re seeking a bigger loan amount or plan to avail the small business loan with a co-applicant, then you will also be required to submit the co-applicant’s photograph, along with his or her KYC documents in order to properly verify the identity of all the involved parties.
Be smart when you raise money for your business
When you are in the process of taking on debt to grow your business, you need to be both smart and careful. Keep in mind that the eligibility process and documents required may slightly differ, depending on whether you’re applying as a proprietor, a private company or a partnership firm and based on which lender you have chosen to apply to. Most lenders also require an asset as collateral or a guarantor from your end to sanction a business loan, so keep this is mind when you choose the right lender for your business.
Usually, your business loan application can be filled in online; after all, with almost everything going digital today, why should this be any different? Thanks to lenders like Bajaj Finserv, the whole process from application to approval can be easily done online. Bajaj Finserv currently offers small business loans for up to Rs. 30 lakh, on which you can get instant approval in as less as one day on successful completion of the application and verification process. Bajaj Finserv also does not require collateral or a guarantor to help small business owners in getting their business loan with ease.
As you take the next step towards growing, expanding and nurturing your small business with much-needed capital, you’ll see how easy it is to acquire a business loan in the absence of traditional red tape from modern lenders like Bajaj Finserv. Now that you’ve successfully gone through a quick guide on the basic business loan eligibility criteria and documents required for its application in India, what are you waiting for?