Business loan is an unsecured loan offered to self-employed individuals including proprietors, partnership, private and public limited companies on the basis of their financials filed over last 3 years. Most banks have a common set of parameters that they evaluate loan applicants with but what exactly these parameters are depends from bank to bank. Banks prefer that your business have at least 5 years of stability and reveals stable signs of growth during last 3 years. Banks give a loan amount up to 60 to 80% of your median annual profits.
Business Loan Eligibility is determined on following factors:
- Last 3 years business financials
- Business Vintage and current level of business activity
- Type of the industry and how the industry is performing in current scenario
- Current obligations of the business entity
- Past credit history of Business Entity
Documents Required:
- Identity Proof: PAN Card, GST Registration Certificate, Partnership Deep, etc.
- Address Proof: Current account bank statement,
- Bank Statement of last 6 months
- Last 3 years business financials like Balance Sheet, P&L, Audit Report (Certified by a CA)
Tenure : Business loans tenure ranges from min. of 1 year up to a max of 5 years
Business Loan Application Fees and Charges:
Business Loan Lenders levy some fees and charges at the time of loan sanctioning which includes Processing Fees. Prepayment of the loan is possible after repayment of a minimum of 6 EMI’s. Foreclosure charges would be applicable as per the banks term and condition. Part pre-payment can be made after 6 months from the Disbursement of the Loan, once in a financial year and the same may vary with bank to bank.