What is a Business Loan?

A Business Loan is a financial facility provided to entrepreneurs, self-employed individuals, and businesses to meet their financial needs such as working capital, business expansion, equipment purchase, inventory management, or managing day-to-day operations. These loans can be secured or unsecured and are designed to support businesses at every stage of growth.

 

Benefits of Business Loan

  • Business Expansion: Helps grow operations, open new branches, or enter new markets.

  • Working Capital Support: Manage daily expenses like rent, salaries, and inventory.

  • Quick Access to Funds: Faster approval and disbursal with minimal paperwork.

  • Flexible Repayment Options: Choose tenure based on business cash flow.

  • No Profit Sharing: Maintain complete ownership and control of your business.

  • Improves Cash Flow: Ensures smooth operations without financial stress.

  • Tax Benefits: Interest paid may be tax-deductible as per applicable laws.

Eligibility Criteria for Business Loan

Eligibility may vary depending on the lender, but generally includes:

  • Applicant must be an Indian citizen

  • Age: 21 to 65 years

  • Type of Business: Proprietorship, Partnership, LLP, Private Limited Company

  • Business Vintage: Minimum 1–3 years of business operation

  • Minimum Turnover: As per lender’s policy

  • Credit Score: Preferably 650 or above

  • Stable Business Income: Regular and verifiable income source

Documents Required for Business Loan

KYC Documents

  • PAN Card

  • Aadhaar Card

  • Passport / Driving License / Voter ID

Business Proof

  • GST Registration Certificate

  • Shop Act / Trade License

  • Udyam (MSME) Registration

  • Partnership Deed / MOA / AOA (as applicable)

Financial Documents

  • Bank Statements (last 6–12 months)

  • Income Tax Returns (last 2–3 years)

  • Profit & Loss Statement and Balance Sheet

Other Documents

  • Business address proof

  • Passport-size photographs

  • Duly filled loan application form