About Business Loan
Business Loan as the name is evident is meant for various business needs. All the business persons avail different types of business loan as per their need and fund requirement. In simple words we could say that it is a debt which a company/organisation is bound to pay back within specific tenure as per the terms and conditions of loan granted.
Business need a huge amount of fund to establish a fresh startup or setup extension of the project. Organisations take this loan for their financial assistance. The unique feature of a business loan is that it does not require any collateral security or credit safekeeping. Further, in case of any default in loan repayment, only the owner is not liable. The assets of entire company will be liquidated and all stakeholders shall be held responsible for it.
Types of Business Loan
There are many types of business loan:
- Overdraft Loan (OD)
- Term Loan
- Mudra Loan
- Kisan Credit Card (KCC)
- Letter of Credit (LC)
- Bill Discounting
- Cash Credit Facility
- Loan Against Shares
- Loan Against Financial Securities
- Loan against property (LAP)
- Bank Guarantee (BG)
- Gold Loan
Eligibility Criteria for Business Loan
Eligibility to get this loan is as following. Please read them carefully.
- The loan applicant should be self employed
- Age of applicant should be in the range of 21-65 years
- The organisation should be a limited or private limited company
- The applicant should be in business for 3 years
- The ITR of 3 years has been filed by the applicant
- The annual turn over of business should be 50 lakh with profit of 2 lakhs minimum
- The applicant should be in the category of service provider or manufacturer
- If you have a partner in business, you are eligible to get higher loan amount making your partner a co applicant
The above points may be applicable for general condition. The specific eligibility is defined in special requirements.
Documents required for Business Loan
The documents required are as below:
- KYC documents of applicant and co-applicant
- ID Proof and Address Proof of applicants
- Bank Account Statements
- ITR of last three years
- Certificates of practice (ISO Certification, Associations, Partnership or Consortium)
- Business Proof (like Registration Certificate) and detailed organisation profile
- Proof of ownership
- Recent Passport size photographs
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