Business Loans
Give your business a boost and zoom ahead of competition!
It is also known as small ticket unsecured business loans and ranges from 3 lacs to 75 lacs for SMEs and MSMEs. It is extended to all business entities. The foremost priority of any entrepreneur is to see his or her business grow, expand, and flourish. To fulfil this desire, business owners opt for business loans to meet their financial requirements. However, getting instant funds is not always possible, as banks and NBFCs take their time in deciding whether to sanction loans or not. Business loans are mostly availed for purposes like business expansion, the purchase of machinery or plants, investments in infrastructure, hiring staff, maintaining inventory, etc. Further, we have discussed all the relevant aspects of business loans for in-depth understanding.
Get funded in 72 hours
*T&C Apply | Rate of Interest Linked with Repo Rate and subject to changes as per RBI circulars
Know More about BUSINESS LOAN
The following people are eligible to apply for a Personal Loan:
~ Self employed individuals, proprietors, private ltd. co. and partnership firms involved in the business of manufacturing, trading or services.
~ The business should have a minimum turnover of ₹20 lakhs
~ Individuals who have been in the current business for a minimum of 6 months .
~ Those whose business has been profit-making for the previous 1 year.
~ The applicant should be at least 21 years at the time of applying for the loan, and should be not older than 65 years at the time of loan maturity.
The following documents are required to apply for a Business Loan:
~ FY23 Provisional financial
~ Last three year audited financials (FY-22, & FY-21 & FY 20), ITR and Computation, Balance sheet, Profit & loss a/c Schedule, Tax Audit Report -Form 3cb, 3cd
~ Form 26AS if any
~ Sanction Letter of all loans- Cash credit, term loans, car loans, loan against property, machinery loans along with schedule.
~ Last 12 months bank statements all banks
~ Address proof (Telephone bill or electricity bill)-latest within 60 days
~ Udyam Registration certificate
~ Trade reference-2 buyers and 2 suppliers contact details
~ Group Company financials and Sanction Letter
~ GST Certificate & GST Returns from April 22 to till date.
Proprietor & Co-Applicant Document
~ KYC – PAN Card, Aadhar Card
~ Photographs of each individual
~ Property Ownership Proof Electricity Bill, Water tax Property Papers
The following documents are required to apply for a Business Loan:
~ FY23 Provisional financial
~ Last three year audited financials ( FY-22, & FY-21, & FY-20), along with ITR and Computation, Balance sheet & Profit & loss, Schedule, Tax Audit Report -Form 3cb, 3cd
~ Form 26AS, If any
~ Sanction Letter of all loans i.e. cash credit, term loans, car loans, Loan against property, Machinery loans along with Schedule.
~ Last 12 months bank statements of all banks.
~ Business Incorporation date proof- PAN Card
~ Partnership deed
~ Udyam registration certificate
~ Address proof (Telephone bill or electricity bill)- latest within 60 days
~ 2 Trade 2 personal Reference Contact details
~ GST Certificate & GST Return from April 22 to till date.
~ Profile of the company (History, Product, Business),
~ Group Company financial and Sanction Letter.
Partners or Individual Documents
~ KYC – PAN Card, Aadhar Card
~ Photographs of each individual
~ Property Ownership Proof Electricity bill, Water Tax, Property Papers
The following documents are required to apply for a Business Loan:
~ FY-23 Provisional financial
~ Last three year audited financials ( FY-22, & FY-21, & FY-20), along with ITR and Computation, Independent auditor’s report, Balance sheet & Profit & loss a/c Schedule Tax Audit Report -Form 3ca, 3cd
~ Form 26 AS if any
~ Sanction Letter of all loans- along with the schedules.
~ Last 12 months bank statements of all banks.
~ Business Incorporation date proof- PAN Card
~ MOA (Memorandum of association) and AOA (Articles of Association) + Certificate of Incorporation.
~ Udyam registration certificate
~ Address proof (Telephone bill or electricity bill)-Latest within 60 days
~ CA Certified Latest share holding pattern + List of directors on the company letterhead
~ 2 Trade 2 personal reference contact details
~ GST Certificate & GST Reruns from April 22 to till date.
~ Profile of the company (History, Product, and Operation)
~ Group Company Financial and Sanction letter if any
Directors & Shareholders
~ KYC – PAN Card, Aadhar Card
~ Photographs of each individual.
~ Property Ownership Proof (Electricity bill or Sale deed copy)
~ Salaried- 10.50% to 32% per annum
2% to 6% one time on the sanctioned loan amount.
The processing fee depends on the credit decision of Financial Institution providing the sanction. At no given point does BazaarMoney / its employees / partners solicit Processing Fee to be paid to our own account. This fee is directly payable to the Financial institution.
The Premature Closure Charges depends on the credit decision of Financial Institution providing the sanction. At no given point does BazaarMoney / its employees / partners solicit Premature Closure Charges to be paid to our own account. This fee is directly payable to the Financial institution.
Premature closure Charges (applicable on principal outstanding) post Cooling Period off / look-up Period.
~ Up-to 24 EMI repayment – 4% of principal outstanding,
~ Post 24 EMI and up to 36 EMI repayment – 3% of principal outstanding,
~ Post 36 EMI repayment – 2% of principal outstanding.
The above are mentioned for Rack Charges. Please read the sanction letter for the actual terms of Charges.
Partial premature payment is allowed post payment of first EMI.
~ Post 01 EMI and up to 24 EMI repayment – 4% of part payment amount.
~ Post 24 EMI and up to 36 EMI repayment – 3% of part payment amount.
~ Post 36 EMI repayment- 2% of part payment amount.
The above are mentioned for Rack Charges. Please read the sanction letter for the actual terms of Charges.
Frequently Asked Questions about BUSINESS LOAN
~ Fixed Interest Rate : Business Loan Interest Rates are mostly fixed, which means the Interest Rate will not change for the entire loan tenure. The business loan interest rate offered by banks and NBFCs starts at 10.5% onwards and can go up to as high as 32%, depending upon the loan amount or applicant’s requirements/profile.
~ Loan Amount : The loan amount that one can avail in business loan can be up to Rs. 2 crore and even more depending on the requirement of the business. The loan amount mainly depends on the financial credibility of the applicant and financial institutions check the eligibility of the applicant before lending the amount. Moreover, financial institutions like banks and NBFCs review the applicant’s credit history/score, Identity proof, business location, business existence, income details before loan sanctioning.
~ Collateral Free Loan : Business Loans being unsecured loans do not require any collateral from the applicant. However, there are specific and very few loans in which plant, machinery or raw material need to be provided as collateral. Applicants do not require providing any asset like car or house to avail business loan.
~ Flexible Repayment tenure : The loan applicants enjoy flexible repayment tenure that goes up to 5 years, making it more preferable over other loans. The applicant also has an option of loan pre-payment in which he/she can foreclose the loan by paying some additional charges defined by the respective bank or NBFC.
Like any other loan, a business loan also analyses an individual’s creditworthiness by checking the repayment capability, business records, financial history and stability. The following is the handy checklist of business loan requirements; you must keep these things in mind before applying to bank for a loan:
~ You must be ready with a well-written business plan to submit to the lender
~ You must keep a decent credit/CIBIL score that shall range between 650-900 points
~ Ensure that you meet the eligibility criteria, business loan requirement and have all the required documents
~ Repay your existing debts at the earliest, if any
~ Have sufficient funds ready, in case the lender needs you to put something forward in advance
~ As you are applying for business loan, you must maintain an inclusive database of the company’s financial situation and past performance along with its cash flow statement
~ If you are applying for a loan for new business then you must focus on the ideas and presentation.
With the above checklist, you will be able to go in the right direction of acquiring the necessary funding for your business.
~ Helps to increases the cash flow
~ Comes with flexible re-payment tenure
~ Higher loan amount can be availed
~ Collateral Free Loans
~ Get pre-approved loans from selected lenders
~ Availability of short-term loans, as well
~ Minimum paperwork
~ Quick disbursal
~ Maintain a high credit score and clean credit history
~ Ensure you have minimal outstanding debt i.e. credit utilisation ratio of 30% or less
~ Apply for business loan with a lender with whom you have a prior relationship
~ Opt for a secured personal loan such as loan against shares, NSC, KVP, LIC, etc.
~ While the above tips are a good starting point to get a lower interest pay-out for your loan, a low interest rate is not completely assured as there are multiple factors that impact loan interest rate.
~ Ways to decrease total interest pay-out
~ While it may not be possible to get the lowest rate of interest for your personal loan, there are 3 ways you can decrease the total interest pay-out on your loan:
> Opting for a shorter tenure – Higher individual EMI but lower overall interest payout
> Part pre-payment/foreclosure – Decreases the loan principal thus interest payout is lower
> Opting for a lesser loan amount – Lower loan principal equals lower total interest payout
~ Reducing Balance Method
Method of Calculation : EMIs are calculated only on the principal amount outstanding after each prior payment.
EMI Payout : Individual EMI payouts decrease with each successive EMI payment.
~ Flat Interest Rate Method
Method of Calculation : EMIs are calculated on the original amount borrowed, i.e. the entire loan principal.
EMI Payout : Individual EMI payouts remain unchanged over time.
The verification process for a business loan involves the following key steps:
Step 1: Once you have submitted your online application we receive your online loan application.
Step 2: Subsequently, OUR representative will call you to verify application details and arrange for pickup of documents required for your loan application.
Step 3: Once the documents have been collected and successfully verified, the personal loan application is approved.
Step 4: Loan is disbursed once the applicant signs the loan agreement.
Once your personal loan application is approved and the loan has been sanctioned, disbursal occurs in one of 2 ways:
Option1. Direct transfer of funds to a savings/current bank account specified by the applicant
Option2. An account payee cheque/ draft sent to the applicant’s mailing address by post
Currently the 1st option is more commonly used as disbursal is quicker and there is no risk of a cheque/draft getting lost in transit by post.
The main factors affecting the disbursal limits of personal loans include the following:
~ Profit margins of the applicant – higher profit level tends to increase the disbursal amount
~ Current EMI payable – higher EMI pay-outs typically decrease the disbursal amount
The list of factors impacting disbursal limits of personal loans mentioned above is not exhaustive and there may be others that impact the disbursal decision made by lenders.
Timely EMI payments of your business loan are essential to ensure that you maintain a clean credit history and good credit score. There are multiple ways you can pay your loan EMI:
~ Standing Instructions – You can use NACH mandate to set up standing instructions
~ Autopay – You can use internet banking to set-up autopay for EMI payment
~ Online Transfer – EMI payments can be made online using NEFT, RTGS, IMPS payments
~ Cheque/Draft – Post-dated cheques (PDC) or drafts can also be used to pay your PL EMI
Do keep in mind that the different EMI payment options mentioned above may or may not be available in case of your lender.
If you are finding it difficult to keep up with your monthly loan repayments, you might be able to negotiate a lower EMI by extending your repayment tenure. You should however bear in mind that in this situation, due to the longer tenure, you will end up paying more interest over the loan tenure.
The alternative is to opt for a personal loan balance transfer. In this case, the principal outstanding of your current loan is transferred to a new lender at a lower rate of interest. As a result of the lower interest rate, your individual EMI payments will decrease.
Tenure up to 4 years
*T&C Apply | Rate of Interest Linked with Repo Rate and subject to changes as per RBI circulars
Amazing Financial Institutions we Partner With
+80 MORE
Portfolio Clients we Work with
Loans starting from 11.5% p.a.
*T&C Apply | Rate of Interest Linked with Repo Rate and subject to changes as per RBI circulars