Business Loan Eligibility and Documents

  Business Type:  Most lenders provide loans to various types of businesses, including sole proprietorships, partnerships, limited liability companies (LLCs), corporations, and more.

Credit Score:  A good credit score is often required to qualify for a business loan. Lenders use your credit history to assess your ability to repay the loan.

Business Age:  Some lenders require a minimum operational history for your business, usually ranging from a few months to a year or more.

Annual Revenue:  Lenders may have a minimum annual revenue requirement to ensure your business has a stable income.

Collateral:  Secured loans might require assets as collateral to secure the loan. Collateral can be real estate, equipment, inventory, or other valuable assets.

Cash Flow:  Lenders often evaluate your business’s cash flow to determine your ability to repay the loan.

Age Criteria:     Min. 21 years at the time of loan application & Max. 65 years at the time of loan maturity.

Eligible Entities:  Individuals, MSMEs, Sole Proprietorships, Partnership Firms, Public and Private Limited Companies, Limited Liability Partnerships, retailers, traders, manufacturers, and other non-farm income-generating business entities engaged only in the services, trading, and manufacturing sectors

Business Vintage : Min. 1 year or above

Business experience:  Min. 1 year, business location to remain same

Annual Turnover:  Shall be defined by the Bank/NBFC

Credit Score:  700 or above (Preferred by most private and public sector banks)

Nationality:  Indian citizens

Additional Criteria:  Applicants must own either a residence, office, shop, or Godown.

Documentation for Business Loans

The list of documents required for a business loan to be submitted varies based on type of business entity. Submit the following documents to begin with the loan process:

• ITR for the past 2-3 years
• Current Bank Account Statement for the last 12 months
• Photocopy of PAN Card
• Address Proof for Residence such as Voter Card, Passport, Aadhaar Card,   Telephone Bill, Electricity Bill
• Address proof for Business such as the Telephone Bill or Electricity Bill
• Last Financial Year’s provisional Financials and future year’s projections.
• Company’s business profile on the letterhead
• 2 photographs of promoters and property owners.
• Sanction letter and Repayment schedule of existing loan
• GST registration certificate and GST returns of latest 2 years.
• D-Vat/Sale tax registration copy
• Udhayam Aadhaar registration certificate
• Rent agreement copy of factory and residence (if property is rented)
• Business Continuity proof of 3 years (3 years old ITR/Company registration etc)
• Company PAN Card, Certificate of Incorporation, MOA, AOA, List of Directors, and Shareholding pattern for Pvt Ltd companies
• Partnership Deed, Company pan Card for Partnership Companies

How to use Business Loan EMI Calculator

Using a business loan EMI (Equated Monthly Installment) calculator can help you estimate your monthly loan repayment amount.

Follow these steps to use a business loan EMI calculator effectively:

• Enter loan amount, interest rate, tenure.
• Click Calculate.
• View EMI, total interest, repayment.
• Adjust tenure if needed.
• Consider extra costs.
• Check budget compatibility.
• Confirm with the lender before finalizing.

Fees and Charges for Business Loan

The fees and charges of business loans usually vary from lender to lender and from case to case. The aforementioned table will give you a fair idea of the fees and charges related to business loans:

Particulars

Charges

Loan Processing Fees1.5% to 5% of Loan AmountLoan CancellationUsually 0 to 5% of Loan AmountStamp Duty Charges60/- to 600/-Legal FeesNilPenal ChargesNilEMI / Cheque Bounce ChargesApprox 499/- to 599/-

Other fees and charges that lenders may levy on your business loan include documentation charges, verification charges, duplicate statement charges, NOC certificate charges and swap.