Getting a business loan is important for various reasons, such as business expansion, handling day-to-day expenses, and purchasing important equipment or materials. If you are new to applying for a business loan, it is natural to be confused about how to get started and what documents will be required.
In this article, we will explain the process of getting a business loan and highlight how to apply easily. And read and understand this article completely.
Features and Benefits of Business Loan 2024:
Before knowing how to get a business loan, it is important to understand some of the important features and benefits of this loan:
- No Collateral Required
One of the advantages of a business loan is that it does not require any collateral. This facility simplifies the loan process, making it convenient even for new entrepreneurs who do not have significant assets to pledge. - Flexible Repayment Term
Business loans offer easy and comfortable repayment terms. Entrepreneurs can customize payment schedules to match their business’s financial flow, providing flexibility to meet the unique needs of each business. - Minimum Documentation
Getting a business loan requires some documentation. This facility not only speeds up the application process but also reduces the burden of excess administration on the borrowers, so that they can focus more on running their business. - Fast Disbursement of Funds
One of the advantages of a business loan is that it disburses funds quickly. Once approved, the amount of money is instantly deposited into the borrower’s bank account. This quick transfer ensures that entrepreneurs can meet immediate financial needs without delay, and helps in effective business management. - Credit Based Interest Rate
The interest rate charged by the lender is based on the credit history of the applicant. This personalized view means that people with strong credit profiles get more favorable terms. This shows the importance of maintaining credit history in borrowing for business purposes.
How to get Business Loan 2024?
To get a business loan, a professional option is to look into seeking financial assistance from a bank or financial institution. It includes applying for a loan to start a new business or to expand your existing business. The interest rate charged by the bank depends on the loan amount and repayment period.
> Check Credit Score
While applying for a startup loan, lenders usually check the applicant’s credit score. For new businesses, it takes time to build a credit history, which is usually available after 6-12 months. Business loans often require a personal guarantee, so the owner’s credit score matters to lenders.
> A credit score greater than 700 increases the chances of loan approval, indicating that the applicant is likely to make timely payments. Because of this, potential loan applicants should check their credit score before applying for a startup loan. These simple steps facilitate a streamlined and more informed application process, which can increase the chances of loan approval.
Eligibility Criteria for Business Loan 2024 :
Before knowing how to go about getting a business loan, it is important to understand the eligibility criteria. Included in the generally accepted criteria.
– Age : 21 to 65 years
– Residence : Indian Resident Permanent Domicile
– Credit Qualification : Good CIBIL Score
– Professionalism of Business : Strong business plan and professional strategy
Apart from fulfilling these criteria, some important documents have to be submitted along with the loan application. Jetman is given as follows.
Required Documents for Business Loan 2024:
- Two passport size photos
- Identity Proof : PAN Card, Passport, Aadhaar Card, Voter ID or Driving License
- Proof of Residence : Passport, Driving License, Aadhaar Card, Postpaid Phone Bill or Voter ID
- Proof of Age : Passport or PAN Card
- Last 6 months bank statement
- Income Proof: ITR and Salary Slip
- Proof of signature : Bank approved signature, PAN card or passport
- Proof of IFSC Code : Canceled or scanned check and copy of bank account first page with ID
Keeping all these documents organized and available simplifies the loan application process, thereby increasing the chances of a successful and smooth approval.
Steps to Apply Online for Business Loan 2024 :
You can easily apply for a business loan online by following the steps mentioned here:
1. Go to the lender’s website
Go to the official website of the lender and find the online application form.
2. Fill the online application form
Complete the online application form truthfully and with relevant details. Fill all the fields correctly.
3. Upload the required documents
All necessary documents should be submitted as per the instructions given by the lender. This may include proof of identity, proof of address, financial statement and other documents provided in the application.
4. Submit the application
After uploading all the information and documents, submit the application through the online portal.
5. Notice of Selection
After successful submission, note that your application has been received, a selection notification will be sent to your registered email address or mobile number.
6. Investigation Process
A representative of the lending institution will contact you for confirmation. If necessary, you may be required to provide further information or clarification.
7. Offer of Loan
After the screening process, a loan offer will be received from the lender. The offer will contain a detailed description of the loan amount, interest rate and other terms.
8. Approval and Distribution
If you approve the loan offer, the last step is to get approved by the lender. After approval, the final loan amount will be directly deposited into your designated bank account.
Government of India Business Loans for Startups 2024 :
Government of India has introduced various startup business loan schemes to support MSMEs and startups. Important schemes include:
~ Bank Credit Facility Scheme
The Bank Credit Facilitation Scheme administered by the National Small Industries Corporation (NSIC) focuses on meeting the credit needs of MSME units. NSIC collaborates with various banks, which facilitate loans with flexible repayment terms. In some cases, the repayment period can be extended up to 11 years.
~ Pradhan Mantri Mudra Yojana (PMMY)
Launched in 2015 under the Micro Units Development and Refinance Agency (MUDRA), PMMY provides loans to various business sectors, including manufacturing, trade and services. The scheme categorizes loans into three categories – Infant, Junior and Youth – to suit businesses of different sizes and needs.
~ Credit Guarantee Scheme (CGS)
This scheme is administered by the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE). CGS is available to new and existing MSMEs, engaged in services or manufacturing activities. It provides credit guarantee for loans up to ₹2 crore, and promotes financial inclusion for various industries.
~ Standup India
Launched in April 2016 and managed by SIDBI, Standup India provides loans to industries engaged in manufacturing, trade or services. Providing loans of ₹10 lakh to ₹1 crore, the scheme has a viable repayment period of 7 years and a tenure period of up to 18 months.
~ Sustainable Finance Scheme
This scheme focuses on providing loans to industries committed to sustainability and sustainability. It supports green energy, renewable energy, technology hardware and non-renewable energy schemes, which are in line with the government’s environmental goals.