Description

💼 Types of Business Loans in India: Start-up, Term Loan & Cash Credit

🚀 Why Do Businesses Need Loans?

Every business — whether trading, manufacturing, or service-based — requires financial assistance at some stage. Even running businesses may need additional capital to:

• Expand operations
• Launch new product lines
• Purchase new equipment
• Cover working capital needs
• Diversify into new markets

To meet these needs, banks, NBFCs, and private financers offer various types of business loans. Here’s a breakdown of the most common business loans available in India:

1️⃣ Start-up Loan – Funding for New Businesses

A Start-up Loan is designed for entrepreneurs looking to launch a new venture but lack the initial capital. These loans are offered under various schemes, including Start-up India and MUDRA Yojana, to encourage entrepreneurship.

✅ Eligibility Criteria for Start-up Loans

Criteria	Description
Age	21 – 65 years
Identity Proof	Aadhaar card, Voter ID, or Driver’s License
Bank Statements	Last 6 months
Credit Score	CIBIL Score above 750 recommended
Business Plan	Strong and viable business model required

🔍 Features

• Unsecured or collateral-free loans up to ₹10 lakhs
• Quick processing for registered start-ups
• Flexible repayment options
• Special provisions for women & SC/ST entrepreneurs

2️⃣ Term Loan – For Business Expansion or Asset Purchase

A Term Loan is a fixed sum borrowed for a specific business purpose such as:

• Purchasing plant & machinery
• Acquiring factory land or commercial buildings
• Buying furniture, tools, or vehicles

✅ Key Highlights

Feature	Description
Loan Amount	Varies as per need and eligibility
Repayment Tenure	Typically 1 to 10 years
Interest Type	Fixed or floating interest rates
Security	Often requires collateral like assets or property

3️⃣ Cash Credit / Overdraft Facility / Flexi Loan – For Working Capital

This is a credit arrangement with a bank that allows businesses to withdraw money beyond the balance available in their account.

🏦 How It Works:

• Secured via hypothecation of inventory or receivables
• Interest is charged only on the overdrawn amount, not on the full limit
• Helps manage short-term liquidity gaps
• Allows flexible usage, repayments, and re-draws

✅ Benefits:

• Useful for businesses with seasonal cash flow
• Cost-effective compared to regular loans
• Great for covering payroll, inventory purchase, bills, etc.

🏢 Apply Through GST Suvidha Centre

At GST Suvidha Centre, we help micro and small businesses choose and apply for the right type of loan based on:

• Business stage
• Financial need
• Credit history
• Documentation readiness

We assist with documentation, application filing, and coordination with financial institutions.

📞 Call now or Apply online at: www.gstsuvidhacentres.com