Which bank is best for Business loans?

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Which bank is best for Business loans?

Computer User Presses Business Loan Orange Button. Business Loan Concept - Modern Keyboard with Business Loan Key. White Keyboard with Business Loan Orange Button. 3D Illustration.

Which bank is best for Business loans?

Why does one need a business loan?


Loans are a great source to financing your business. With Business loans you can start a new business, expand operations of your existing business or purchase new machinery or set up a new plant. The need for financing new business is increasing day by day with the increased number of businesses in India.

Documents required for a business loan:


  • Identity Verification ( for both company and individual)
  • Address Proof (Voter ID, Passport or Driving License, Aadhaar Card, PAN card)
  • Financial statements for the previous six months.
  • Income records from the last two years.
  • Proof of continuity (ITR, Trade License, Sales Tax Certificate)

The following are the business loan criteria that must be met:


Nationality: Indian
Age: 24 years to 70 years
Employment position: Self-employed or at least three years of stable business
A CIBIL score of 685 or higher is required.

Factors to consider before taking a business loan:


  • When you opt for a business loan, find out how much it will cost you.
  • Determine the cost of a credit facility you intend to take out.
  • Estimate your collateral capabilities.
  • Evaluate all of your financing alternatives to find the best fit..
  • Recognize the interests and expenses it entails.
  • Make sure your business paperwork are in order.
  • Evaluation and worthiness of Individual Organizers, Company owners, and Directors' Credit Ratings or CIBIL Scores.

Banks/ institutions in India that offer business loans:


Following banks/ institutions are offering business loans with competitive interest rates:


1. Kotak Mahindra Bank:




The detail specifications of Kotak Business loans are as follows:

Loan Amount (in Rs.)

Effective Interest Rate

Interest Rate Type

7.5 Lakhs to 40 lakh

6.85% to8.15%

Floating

20 lakhs to 1.5 cr. for Abroad study*

6.85%

Floating

Collateral / Security

Not required

Processing Fee

2% of the loan amount plus  GST

Documentation Charges

(Rs. 3500 for loan amount or  Rs 6000 for loan up Rs. 10 lakh)plus GST

Eligible Entities

Private Ltd. Companies, Sole Proprietorship, Partnership firms, Trusts and Limited Liability Partnerships engaged only in Manufacturing, Trading or Services sectors

Profit Requirement

For at least 1 year

Business Tenure

Min. 3 years

Annual Turnover

Rs. 40 lakh

2. HDFC Bank:


HDFC Bank image

Loan amount and other specifications Of HDFC Business Loan are

Loan Amount

Maximum Rs. 50 lakh

Interest Rate

16% onwards

Maximum Repayment Tenure

48 months

Collateral / Security

Not required

Processing Fee

Up to 2.50% of loan amount (Minimum Rs. 2,359 – Maximum Rs. 88,500)

Documentation Charges

(Rs. 3500 for loan amount or  Rs 6000 for loan up Rs. 10 lakh)plus GST



Eligibility Criteria


Status of Business

Minimum 3 Years with 5 years of experience

Business in same premise

3 years

Property Ownership

Must be Self/ Family owned

3. Flexi loans Business Loans:




This is a Non-Banking Finance Company that offers different types of finance to SMEs. Details loans products are mentioned below:

Category

Loan Amount

Interest Rate

Eligibility Criteria

Repayment Tenure

Sales Criteria

Term Loan

Up to Rs. 1 crore

1% per month onwards

Minimum 1 year

Of Business

Up to 24 Months

Minimum Rs 2 Lakh

Vendor Financing

Up to ₹2.5 Crore

Determined by the terms and circumstances agreed upon by the involved parties.

At least One year of Business

Up to 12 months typically

Loan (Against Invoice) Tenure: From 30-120 days

Credit provided up to 90% of

Loan against POS

Up to Rs. 1 crore

Decided after credit analysis

At least One year of Business

3 months to 24 months

Minimum Rs 1 Lakh

Line of Credit

Up to Rs. 1 crore

Depends on sales data

At least One year of Business

3 months to 24 months

Minimum Rs 1 Lakh


5. Axis Bank


Features of Various Axis Bank Business Loans are as follows:




Loan Amount

Up to Rs. 30 Lakh

Interest Rate

17% onwards

Maximum Repayment Tenure

36 months

Collateral / Security

Not required

Processing Fee

2% of loan amount plus applicable taxes

Prepayment Charges

Nil

Foreclosure Charges

Up to 4% on the principal outstanding for up to 24 months

Minimum Business

5 years



Business Loan schemes for Startups by the Indian Government


The Micro, Small, and Medium Enterprises (MSME) sector in India has minimal exposure to structured funding, hence the Indian government opted to carry out MSMEs and new startup business loan packages.
  • The Bank Credit Facilitation Scheme: is a programme that allows banks to make loans to each other. It is aimed at satisfying the financial needs of MSME units and is led by the National Small Industries Corporation (NSIC). The NSIC has teamed up with a number of banks to give loans to small businesses. The payback period of the policy is around 5 and 7 years, however it can be expanded up to 11 years in exceptional circumstances.
  • Pradhan Mantri Mudra Yojana(PMMY): This policy, led by the Micro Units Development and Refinance Agency(MUDRA), was introduced in 2015 with the goal of providing credit to all types of production, commerce, and industry and service operations. The programme provides three types of loans: Shishu, Kishor, and Tarun, with loan sums starting from Rs.50,000 to Rs.10 lakh. Skilled workers, retailers, vegetable sellers, technicians, service workshops, and others can apply for a Mudra loan.
  • Credit Guarantee Scheme (CGS): This credit is available to new and current MSMEs engaged in commercial or industrial operations, with the exception of academic establishments, agricultural, retail sectors, Self Help Groups, and others. Within this scheme, the Credit Guarantee Fund Trust for Micro and Small Enterprises can lend up to Rs.2 crore.
  • Sustainable Finance Scheme: The SIDBI is in charge of this programme, which intends to provide loans to businesses that deal with renewable power, sustainable sources, technical equipment, and non-renewable energy. The government created this programme with the goal of assisting the full value chain of greener manufacturing, power efficiency, and sustainable economic projects.
  • Psbloansin59minutes.com: This is an online service that involves applying for business loans if you want to start a company. You can borrow up to Rs.10 lakh under the Mudra Loan plan and Rs.5 crore under the MSME Loan program, depending on your qualification and other restrictions. You could also register for a personal loan for up to Rs.20 lakh, a home mortgage worth up to Rs.10 crore, and a vehicle loan worth up to Rs.10 crore.

FAQs


1. Who all are entitled to opt for a small business loan?
The loan is available to any company with less than 500 employees. The programme is open to all states and territories. Anyone who are self-employed, contract employees, or sole entrepreneurs are also entitled.

2. What are the criteria for obtaining a business loan?
The requirements for applying for a business loan in India.
  • The applicant must be minimum 21 years of age to maximum 65 years of age.
  • For a business loan up to 1,500,000, the company's revenue must be greater than 150,000 per year, and for a business loan greater than 1,500,000, the operating income must be greater than 300,000.
  • Business that is a partnership or a sole proprietorship.
  • A last of 25% of each stake can be added to the company's earnings.

3. How do I proceed towards getting a business loan?
Arranging for a business loan is a smooth procedure. To seek a business loan, customers would have to only:
1) submit complete customer data.
2) Include necessary data about your job or self-employment.
3) Determine the category of corporate loan and the duration of the borrowing.
4) Complete an application and submit it.

The loan will indeed be issued after the proposal has been examined and validated.

Which bank is best for Business loans?

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