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How Can You Avail Quick Business Loans In 2021

You can avail of a business loan for expanding your business or for additional expenses related to your business. These loans are customized based on the business requirements to keep your business running smoothly. Business loans do not need collateral and hence require a lesser waiting time to process the loan. You can apply for a business loan from a bank or NBFC quickly. A business loan can be obtained promptly within 15 minutes to a week, depending on your documentation, eligibility, and the shortlisted lender.

How Can You Avail Quick Business Loans In 2021?

To avail of quick business loans, one must meet eligibility criteria for the loan. Check out the eligibility criteria below:

Business Loan Eligibility

  • You need to be a Self-employed individual/ proprietors/ private limited company/ partnership firm working in manufacturing, trading, or services.
  • The business should be at least three years old, and you need to have at least five years of business experience.
  • You should be at least 22 years of age while applying for the loan and less than 65 years of age at the time of maturity.
  • Enterprises should have a minimum turnover of Rs 10 Lakhs.
  • Enterprises should have been making profits for the past two years.
  • Enterprises should have a Minimal Annual Income (ITR) of Rs 2 Lakhs per year.

Business Loan Documents

Business loans require minimal documentation as they are collateral-free. The loan application involves the primary KYC documents to establish your identity and business process.

Here’s a checklist for your reference:

  • Recent photographs
  • Pan CARD
  • Address proof
  • Bank Statements
  • GST or ITR 
  • Income proofs for the past six months
  • Proof of business existence

You can avail of business loans of up to Rs 50 lakhs*  without collateral. The loans are credited within 24* hours if all the documents are intact. So, go ahead and apply for a customized business solution that you can flexibly repay within 60 months. 

Must Read: 10 Questions Lenders Will Ask When You Need a Business Loan

Debt Financing Vs Equity Financing – Which Works Well For Business Owners?

Running or starting a business is never a child’s play for obvious reasons. Apart from the hard work and strategies that go into commencing the company, having necessary funds is important as well. As a small business owner, you have a few options to choose from when it comes to finances. Out of the possibilities, business loans, debt financing and equity financing work best for small business owners. Let’s find out which is the most suitable for you in the below section.

Debt Financing vs. Equity financing – which works well for business owners?

Criteria Debt financing Equity financing
Definition Debt financing is the type of funding where you avail loans from the lender with an agreement to pay back in equal installments.  Equity financing means selling the shares of the company to investors who will take part in profits once the business turns successful. 
Risk The risk factor is high as the collateral is with the lender, and missing out on repayments can result in the taking over of assets by the lending institution. Equity financing is practically risk-free for business owners as the investors take the risk here.
Control As a business owner, you have full control of your business since there is no control from the lender’s end once the loan is paid You have lesser control and need to discuss with your investors on significant decisions
Difficulty level Since most lenders provide business loans, getting loans might not be too difficult Getting an investor can be tedious

Conclusion

Based on the above criteria, a business owner can decide on choosing the best option and apply for a loan with the appropriate business loan documents.

Must Read: Short-Term and Long-Term Business Loan- Which One Is Best For You?

What Are The Small Businesses Loans Available For Minorities?

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In this harsh world of business, it is challenging to become a top entrepreneur, especially for minority business owners. To aid financial necessities in income-generating ventures and solidarities the National Minorities Development and Financial cooperation have devised concession loans.

There are different types of business loan in India. One can choose according to their requirements. Let’s delve further into this.

There are two credit lines for annual income defined to be eligible under this scheme.

  • Credit Line I : 

    • Rural sector: Rs. 81,000
    • Urban sector : Rs. 1.03 Lakhs
  • Credit Line II:

    Annual family income of Rs. 6 Lakhs

Schemes:

  1. Term Loans
Line of Credit  Max Limit allowed
Credit I Rs. 20 Lakhs*
Credit II Rs 30 Lakhs*

The Interest rate for 

  • Men: 6% 
  • Women: 8%

2. Micro Finance

Line of Credit Max Limit  Interest rates
Credit I 1 Lakh* 7%
Credit II 1.5 lakhs* Men: 10% 

Women: 8%

3. Mahila Samridhi Yojana

  •  Self-help women groups are sanctioned micro-credit of Rs. 1 Lakh* per member 

Small Business Loans from NBFC

Specific NBFCs, e.g. Fullerton India, provides solidarity loans from Rs. 22,000 to Rs. 45,000* for short tenures for women without any collateral.


Conclusion

Small business loans help small ventures to grow. Applicants can choose the best-suited plan, lender and interest rates using business EMI calculator.

Must Read: Top 6 Business Loan Myths That You Should Ignore

Important Things Financial Institutions Ask if You Apply for a Business Loan

Securing funds through business loans continues to be the standard choice for businesses. With the advent of online applications, things have become easy “ business loan apply” options online.

But there are several things which everyone have to check before applying for business loan. Because every financial institutions have different requirements. But some of the common things are mentioned below which is surely asked by financial platform.
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Crucial flags Considered by the Lender

  1. Collateral

Financial institutions scrutinise the collateral submitted by applicants to reduce the risk of default. 

  1. Business plan 

Most of the lenders request applicants to submit their business plan with a summary that includes details regarding the team, financials, product and company.

  1. Business financial statements

These audited financial statements should include both personal and business details of any debts in the past, credit card statements, and investment details.

  1. Details on accounts payable and receivable

Lenders would also necessitate reference details along with credit and sale history.

  1. Insurance details

To ensure there is no scope for default, lenders might request for the insurance details

  1. ITR and GST returns (of the past six months or one year.)

Conclusion

After the Startup India campaign in 2015, business funding schemes have been on the rise. Applicants can choose the best plan suited for them using a business EMI calculator. With the right lender and authentic data submission by applicants, availing a business loan is far from complicated.

Must Read: Stages to Get a Business Loan That you Must Know