Business Loan

All businesses, whether it is a trading, manufacturing or a service related, need financial support if sufficient capital is not available with the owner. Sometimes, a running business also needs loan for its expansion or diversification of business.

There are several types of business loans available from banks, financial institutions, private financing agencies etc.
 

• Start-up Loan
• Term Loan
• Cash Credit or Overdraft Facilities or Flexi Loan
• Start-up Loan
  
  All business ventures, in the beginning, require some amount of capital and financial strength. Money is most important to the funding of all new businesses.
  
  In many occasions, a new business owner might not immediately possess the necessary capital for their start-up business. In such cases, the most feasible option is to apply for a start-up India loan to start a business. There are many different types of start-up business loans that vary depending on the nature and aim of the business.
  
  Eligibility for a New Business Loan in India
  
  Though the approval of Business Start-up loan mostly depends upon the profile and repaying capacity of the party requiring the loan, the following requirements must be met in order to be eligible for the loan.
• The applicant for the start-up business financing should be above the age of 21 years and should be below the age of 65 years.
• Proof of the individual must be provided in the form of a driver’s license or Aadhaar card.
• Bank statements for the past six months must be procured and presented at the time of loan negotiations.
• CIBIL Score is also a vital role to play in obtaining Loan. It should be more than 750.

Term Loan

Term Loan may be required by a business house at any time to meet the procurement of Plat or Machinery, Factory land or building, furniture or for any other business needs.

It’s a fixed amount loan which may be repaid during a fixed period based on loan repayment schedule through EMI.

Various banks/ financial institutions/ private finance agencies provide term loan at an eligibility criteria. You have to fulfil their requirement to get a loan and arrange for primary and collateral securities for such loan.
 

• Cash Credit or Overdraft Facilities or Flexi Loan

Truly speaking, it is actually an arrangement with bank for making payment over and above the balance lying with bank. The limit of excess drawings is secured through hypothecation of stock. In this arrangement, the interest is charged only the amount of excess drawing for the period it is not equal to the balance. Thus, when a business having Cash Credit arrangement is having positive balance in its current account, no interest is charged by the bank.