Self Employed

Business Loan :
Business  loans are loans given to business class for  any purpose  which are given without  any collateral or guarantor. This is a very unique loan product wherein the borrower is at his/her discretion to do whatever they need.   In other words , unlike any other loan product viz a  car loan or a consumer durable loan or a  housing  loan, a business loan can be used by the borrower   for any of his/ her business or personal needs. There is no restriction for the usage of such loans though it  should not be used for speculative purposes and investment in tax saving instruments.  The loan can be repaid like all other loans through the equated monthly instalment ( EMI)  process where a fixed amount is paid each month.

Business Loan Features :

  • They are  unsecured loan.
  • They are  any purpose loan .
  • They come at an attractive rate of interest.
  • They are relatively short term loans vis a vis other loans, (i.e  3 to 5 years)
  • Business loans can be given to individuals , Partnership Firms & Companies also.

Business Loan Advantages :

  • First and foremost  advantage of a Business loan is that it is an any purpose loan.  Be it be holidays, wedding  in family, to pay off your dues in credit cards, sending your child for higher education, buying jewellery, buying a piece of plot which otherwise no banks fund, and to meet any contingencies. You  need not have to furnish the end use of loan to the bank.
  • The loan does not require any security or collateral. It does not require a guarantor either.
  • The documentation involved is very minimal.
  • The time taken for loan  approval is  very minimal


Business loan eligibility

  • Self Employed Professionals
  • Self Employed Non Professionals ( Business People )
  • Business Establishments ( Partnership Firms and Private Limited Companies)
  • More than 3 years of continuous business

Documentation:

The documentation for business loans is one of the simplest. Basic KYC documents and income documents would suffice to get a Business Loan.

The general list for obtaining a Business Loan are as follows:

1.  Photograph
2.  Identity proof
3.  Address proof
4.  Income proof
5.  Bank Statements
6.  Continuity Proof
7.  Qualification proof( applicable only for Self Employed Professionals)

The deatailed documents are as below:

Identity Proof (Any one of the following)

  • Copy of PAN Card
  • Copy of Passport
  • Copy of Driving  Licence
  • Copy of Government ID card
  • Copy of Voter  ID card
  • Copy of Company ID Card ( for select Corporates)

Address Proof (Any one of the following)

  • Copy of Passport (Can also be used as proof of identity)
  • Copy of Telephone Bill  (both landline and post paid mobile connection)
  • Copy of Driving  licence
  • Copy of Voter ID card
  • Copy of Ration card
  • Copy of Electricity bill
  • Copy of bank statement ( computerised statements only)
  • Copy of Life Insurance premium receipt
  • Copy of any title deed( Sale deed/ Index II)
  • Copy of Property tax receipt
  • Copy of Leave & License Agreement
  • Copy of latest credit card statement

Age Proof (Any one of the following)

  • Copy  of PAN card
  • Copy of Passport
  • Copy of Birth Certificate issued by competent authority

Signature Verification Proof( Any of the following)

  • Copy of PAN Card
  • Copy of Passport
  • Copy of Driving License
  • Signature verification from Bank

Income Documents For Self-employed Individuals :

  • Copy of last two year IT returns along with computation of income, Balance sheet and Profit & Loss a/c  , audited reports ( in case of audited financials)
  • CA certified financials ( in case of unaudited financials)
  • Bank statements of last six months of the main business banking

FAQ’s:

1. What is a Business Loan?

Business Loans are unsecured loan which doesnot require any security or collateral .It also doesnot require any guarantor

2. Who can apply for a Business Loan?

Any individual who has got a source of income from   business and profession  can apply for a business loan.

3. When can one apply for a business loan?
You can apply for a business loan in order to fulfil any of your  business needs which requires   financial assistance . The loan can be used for  buying a plot, expansion of business,  wedding expenses, hospitalization  expenses, holiday packages, buying jewellery, higher education  etc.

4. Where can I get a business loan from?
Business Loans are offered by nationalized banks, private banks , foreign banks and a few Non Banking Finance Companies.

5. Is there any security or  collateral for a business loan?
Business loans doesnot require any  collateral or security.

6. What is the maximum one can get as  a business loan?
Business loans are available in the range of Rs. 1 lac  to  Rs.30 lacs  depending on the income eligibility of an applicant. However banks  also have specially designed products to offer  higher loans.

7. What is the maximum tenor  for a  business loan?
The  tenor of business loan ranges from  12 months to 60 months. However it should be noted that tenor is the discretion of the bank and also in most of the case, the tenor is restricted to 36 months.A few banks offer 60 months tenor to professionals like Doctors, CAs etc.

8. Is there any fee for availing a business loan?
Yes, you have to pay processing charges as decided by the bank from time to time.

9. How do  I repay a business loan?
Business loans are generally repaid by way of  equated monthly instalments( EMI)

10. Is there any moratorium period for repaying business loan?
No, moratorium is not applicable for business loans. Generally first EMI starts within 45 days of the disbursement of loan.

11. What is the rate of interest that will be charged on my business loan? 

Rate of interest is a factor of prime lending rate (PLR) as announced by respective banks from time to time which varies with market  conditions.   

12. How much time does it take to get a business loan ?
Generally it takes 6 to 10 working days to sanction a business loan after completion of all formalities in terms of compliance in documentation.

13. Can I get a rebate on the interest rate &  processing fee?
Yes, a few banks offer special rates for those who have a relationship with their bank. The relation ship could be a bank account, exisiting loan, a credit card etc.

14. What if I want to prepay my business loan?
Most banks allow its customers to prepay business loans  after 6 months of disbursement . Generally ,banks charge a penalty of upto 5% as prepayment charges on the principal outstanding.

15. What if  a few EMIs are not paid in time?
It is in the interest of the borrower to repay all the EMIs as per schedule. Delay in payment of EMIs or default would badly affect the credibility of the borrower. Moreover getting a loan at a later stage would be difficult. Generally banks share the credit history of a borrower with credit bureau and in turn they share data of credit history of a borrower with other banks.

Rate of Interest

14% – 32% reducing

Processing fees

1% – 3%

Pre Closure charges

0% – 5%

Tenure

1 year – 3 years

Part payments Option:

Some banks have this facility while most of them don’t have it.

To know more about your offer and rates please call us or to receive a call back please submit the quick inquiry form.