New Delhi: Starting a small business is a dream come true for many entrepreneurs. Although the rewards can bring value to life, the journey is filled with many challenges. One such challenge is to finance small business adequately. For starters, one can always opt for a business loan, but one with limited funds or experience can always opt for a small business loan in India.
What is a small business loan?
A small business loan is an unsecured loan with a maximum amount of Rs 10 lakh to Rs 50 lakh and a maximum term of 60 months. It offers flexibility of repayment and the lowest interest rates in the market.
Eligibility for small business loan
The borrower should be a resident of India, above 21 years old, and the maximum age allowed is up to 65 years old. Further, the borrower should be self-employed with at least three years of business experience. The business balance sheet should indicate consistency and profitability.
Documents required
The borrower must submit the audited financial statements for the last two years and the previous year’s GST returns. Further essential documentation must also be submitted, such as licenses and approvals to start the business, KYC documents, and the details of the relevant bank account with six months’ bank statements.
How to apply for small business loan
One can apply through online or offline modes available with various private banks, government banks, NBFCs, and Fintech companies. Borrowers can visit the bank’s website or walk in through any of branch of the financial lender.
Conclusion
It is important to remember that a small business loan is unsecured, so there is no need for collateral to back up the loan. Further, one should also keep in mind the different interest rates, which start at 11% onwards, and the loan processing fee, which can go up to 6.5% of the loan amount.
Business loan: Today, individuals looking to expand or start their businesses can opt for small business loans offered by various financial lenders. This article explores ways a person can avail of a small business loan to start a business. Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
