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Business Loan

Delhi-NCR, India

Basic Details

Turnover : 10000
  • Eligibility
  • Documents
  • Terms

The eligibility criteria of a Business loan applicant is as follows:

Existence

Your business should be in existence for more than 1 year.​

Turnover

The business should have a considerable turnover, which would depend upon the industry to which it belongs.

GST Registration​

The credibility of a business and its revenue figures is strengthened by a GST registration and monthly returns.​

Industry​

The recent trends in the industry in which the business operates. For e.g. Banks were reluctant to lend money to airline companies in the COVID scenario.

Credit History​

Your credit score (in care of proprietary business or partnership) which is a function of your credit history such as repayment pattern of earlier loans, credit card limit utilization, defaults in payment of EMIs, among other factors is very important determinant of your eligibility. In case of companies, it’s credit history will be taken in to consideration.​

Financial Position​

The current capital structure of the company, financial strength, profitability, any outstanding credit facilities, and financial covenants such as Debt/Equity ratio, Interest coverage ratio depict the ability of the business to repay.​

Current Bank Account And Adequacy Of Average Balance​

There may be other criteria set by lenders such as profession, age, minimum salary amount, residence, experience, minimum profit for self-employed, security, guarantor, etc.​

Miscellaneous​

There may be other criteria set by lenders such as profession, age, minimum salary amount, residence, experience, minimum profit for self-employed, security, guarantor, etc.​

Documents Required :

  • PAN Card
  • Partnership Deed
  • Continuity proof ( DVAT / sales / service tax registration / 1 month current account statement if 3 year old account)
  • Office address proof ( GST registration / DVAT/ sales / service registration / current account / mobile or post-paid bill any 1 required )
  • Latest 2 years ITR with complete financials ( audit report if Turnover is 1 crores )
  • GST Registration Certificate
  • Latest 1 year GST return (3B)
  • Latest 1 year bank statement of all current account & OD/CC account ( if any)
  • All running Loan Schedule
  • OD/CC Sanction letter ( if any )
  • Photo
  • PAN Card
  • Aadhar card
  • Current residence proof (Aadhar card / voter id / post-paid bill / passport / driving licence / saving account statement any 1 required)
  • Ownership proof of any 1 partner ( electricity bill / water bill / property papers / house tax receipt any 1 required )
  • PAN card
  • MOA + AOA
  • Latest list of directors & shareholders on company letter head & with CA stamp
  • Continuity proof ( DVAT/ sales / service tax registration / 1 month current account statement if 3 year old account)
  • Office address proof ( GST registration / DVAT / sales / service registration / current account / mobile or post-paid bill any 1 required )
  • Latest 2 years ITR with complete financials & audit report & independent auditor’s report & director report 
  • GST registration certificate
  • Latest 1 year GST return (3B)
  • Latest 1 year bank statement of all current account & OD/CC account ( if any)
  • All running loan schedule 
  • OD/CC Sanction Letter ( if any )
  • Photo
  • PAN Card
  • Adhaar card
  • Current residence proof (Aadhar card / voter id / post-paid bill / passport / driving licence / saving account statement any 1 required)
  • Ownership proof of any 1 partner ( electricity bill / water bill / property papers / house tax receipt any 1 required)
    • Photo
    • PAN card
    • Aadhar card
    • Current residence proof (Aadhar card / voter ID / post-paid bill / passport / driving licence / saving account statement any 1 required) 
    • Ownership proof ( electricity bill / water bill / property papers / house tax receipt any 1 required )
    • Continuity proof ( DVAT / sales / service tax registration / 1 month current account statement if 3 year old account)
      office address proof ( GST registration / DVAT / sales / service registration / current account / mobile or post-paid bill any 1 required )
    • Latest 2 years ITR with complete financials ( audit report if turnover is 1 crore )
    • GST registration certificate
    • Latest 1 year GST return (3B)
    • Latest 1 year bank statement of all current account & OD/CC account 

All running loan schedule OD/CC sanction letter ( if any )

      • Photo
      • PAN card
      • Aadhar Card
      • All running loan schedule OD/CC sanction letter (if any)

Terms & conditions :

Interest rate

It varies from 11% to 20% p.a. depending upon the lender and the financial condition, industry, purpose of loan and credit history of the borrower. It can also be based on Marginal cost of funding based lending rate (MCLR) i.e. flexible based on policy rates and cost of lenders.​

Tenure

It’s up to 7 years for term loans. For working capital loans it’s up to 12 months with annual review.​

Processing charge

It varies from 0.20% to 2.50% with a minimum and maximum limit and is paid upfront on the loan amount. It can also be charged on a staggered basis as a fixed amount by banks.​

Prepayment/foreclosure charges

In case principal amount is partly paid before it falls due, a prepayment fee is charged. It varies from 2% to 5% of the principle outstanding depending upon the time elapsed and/or amount outstanding. Some lender don’t charge a prepayment fee at all.​

Security

In case of working capital loans, hypothecation of stock and receivables is required. In case of term loans, hypothecation of assets created out of the loan proceeds is required. Commercial/residential properties such as land and building, and fixed deposits are also accepted as a security in a few cases.​