Business Loan in Delhi at Low Interest Rates
SBA (Small Business Administration) Loans are loans that are given to small businesses which are not able to qualify for a loan from a financial institution for various reasons from lack of business history, lack of collateral to “secure” the loan or not having an adequate credit history. The SBA is not a direct lender but acts as an underwriter on behalf of the bank that funds the loan for the business entity. If the borrower defaults on the loan the SBA will pay the bank a percentage of the balance for taking the financial risk to loan the funds to the business. There are various types of SBA loans which will not be covered in this article but a future article will explain in more detail.
Conventional Business Loans are loans that are either unsecured meaning no asset is used to approve the loan or secured and called “asset based loans” where assets from inventory, equipment, accounts receivable or real estate are used for underwriting for loan approval. Conventional business loans are given to business entities that have great banking relationships, established business credit history with trade lines with other businesses they do business with and good standing with various credit reporting entities like Dun & Bradstreet. There are short term loans with interest only payments with the balance due at the end of the loan usually referred to as a “Balloon Loan”. There are also longer term loans that are fully amortized (principal and interest in each payment) paid over one to five years or more.
Equipment Leasing is a financial instrument which technically is not a loan. Meaning based on tax ramifications and who owns the equipment – leasing is just that – leasing an asset owned by another entity. Leases are usually from large corporations or a bank. The lease term can vary from one to five years or more and there usually are tax benefits to the business entity in leasing new or used equipment.
Equipment Sale Leaseback is a transaction to use equipment that is already owned by the business or municipal entity to secure funds for the present need for operations. The term can vary from one to five years and the amount of funds can vary based on credit history and a percentage of the fair market value of the equipment. The company then in turn leases the equipment back in usually a monthly payment. The company or the lessee normally has different choices on what they want to do with the equipment at the end of the term. They can roll the lease transaction into newer more updated equipment or software. They can buy the equipment for one dollar or ten percent of the fair market value of the equipment. More and more companies are leasing today as opposed to paying cash or using bank lines or loans.
Business Loan Eligibility Criteria
|Self employed non professionals – Sole proprietors, partnership
firms, private limited companies, public limited companies involved in the
business of manufacturing, trading and services
Self employed professionals – Doctors, CA, CS, Architects.
|Age||21 – 65 years|
|Loan Amount||₹ 50,000
to ₹ 25Cr
|Interest Rate||14.50% – 22.00%|
|Loan Tenure||Up to 5 years|
|Business Vintage||For selfe mployed professional – 3 years
For self employed businessmen – 3 to 4 years
|Annual Turnover||₹ 1 Cr
|Banking Stability||6 months and above|
|CIBIL Score||650 or above|
|Other Eligibility Conditions||Borrower should have a self owned house or work place|
Factors that depends eligibility for Business loan are
- Eligible Age– Banks take into account customers with age of twenty one years to sixty five year
- Loan Amount– ₹ fifty,000 to ₹ a hundred atomic number 24 may be availed on commercial loan. huge loan quantity, increse possibilities to induce low rate.
- Loan Tenure– Business loans square measure unsecured loans and given for a tenure of one year to five years.
- Income Tax Returns (ITR)– A self utilized will notice a commercial loan, only if it’s filed regular ITRs for the last four years.
Banks take into account borrowers World Health Organization have filed ITRs of three years or a lot of as eligible to induce a commercial loan. Banks measure your monthly financial gain and compensation capability depends on details submitted within the ITRs.
- Turnover– Turnover is that the financial gain that a commercial enterprise has attained from the sale of products and services to customers. it’s additionally termed as sales or turnover.
In case of execs, this sales or revenues is measured in terms of Gross Annual Receipts. Most banks and NBFCs arouse a minimum annual turnover of ₹ one atomic number 24 to be eligible for business loans while not collateral. However, there square measure a number of NBFCs and banks that fund to businesses or self utilized with turnover of but Rs. twenty five large integer still.
- Business Vintage – Business vintage and growth is a vital issue take into account by banks and NBFCs to require a call to fund you loan. It provides the bank or NBFC AN assurance that your business ought to be authentic, stable and profitable to repay their loans.
Banks basicaly hunt for a business stability or profitableness of minimum three years for self utilized professionals. just in case of the other businessmen, loaner firms need a minimum business continuity of five years Banks and NBFCs additionally specify the minimum rate of 15-20 you bored with sales or turnover for the last three years to be eligible for a commercial loan. Further, your business or enterprise ought to be profitable within the last two years.
- Banking Stability – Lenders a check bank statements of minimum half dozen months of your operational banking accounts to approve your loan. Banks can measure your banking stability and compensation capability depends on your average account balance. Banks also will take into account your outward and inward cheque bounce info to require a read on your credit track history.
Documents required for Business Loan
Signed Application Form
Identity Proof (PAN)
Residential Address Proof
Last 3 years ITR (self and business), complete financial certified/audited by a CA.
Last 12 months bank account statement (self and business)
Certificate and Proof of Business Vintage/Gst menditory
Office address – ownership/ rent agreement/ utility bill
|PAN card, Passport, Driving License, Aadhar Card, Voter id, Govt
|Certificate and Proof of Business Existence||PAN , sales tax/ excise/ VAT/ service tax registration, Copy of
partnership deed, Trade license, certificate of practice, registration
certificate issued by RBI, SEBI
|Address Proof||Passport, Driving License, Election ID card, Electricity/
Telephone/ Mobile bill/ bank statement (not more than 3 months old)
|Bank statement, utility bill, Registry copy, lease or rent
agreement, TAN allotment letter