Business Loan

Business Loan - Eligibility, Documentation and Application

Invest in real estate or expand the operations for a better business line. A business loan is necessary to straighten the finances for small and big companies. A quick business loan reduces the financial shortcomings to achieve all the career goals. Sometimes arranging immediate funds to close the annual taxes and other times for business equipment. To get all this with no collateral, avail the all new business loans at Buddy Loan. Getting a Business loan online is the most efficient and safe approach for better financial solutions.

In case of small and large businesses, the entrepreneurs are in constant pressure meeting the financial needs such as increasing manpower, purchasing inventories, to increase the working capital. Paying a small quick business loan back at the right time can help in building a good credit score! Yes! Business loans are subjective and offer the best help during the financial crisis. Do understand, that if the applicant has a record of better credit score, the chances of getting the loan at a lower interest is high. The process is easy and faster.

The major difference between secured and unsecured business loans is submission of collateral. Secured loans are guaranteed, so lenders are more lenient with terms and requirements whereas unsecured loans have more restrictions because they are not secured with a collateral.

Particulars Secured Loans Unsecured Loans
Collateral Requirements Collateral required Collateral not required
Credit Score Requires a decent credit score. Good credit score and credit history required
Interest Rates Lower interest rates Higher interest rates
Personal Guarantee Not required due to use of collateral May be required by some lenders

Banks offer you Unsecured Business Loan to fulfil any financial commitment that you may have. You can avail this loan without any security and minimum documents. The interest rates are available in 2 types - fixed and floating + margin and the default interest rate is 24% p.a. You can use this loan to meet financial requirements for SMEs professionals, service providers and manufacturers and traders. This loan can also be taken for expansion of business, meeting the requirement of liquid cash, meeting expenses and other aspects involved in running the business successfully.

Eligibility criteria for Unsecured Business Loan

  • The business should be in operation for a min of 5 years in the same line.
  • The company has to submit documents such as balance sheets, profit and loss accounts, tax computations, audit reports, and the last 2 years reports from the Directors.
  • Bank statements of 6 months must also be provided in the name of the loan applicant or the business name.
  • KYC documents of partners/promoters/proprietor/key directors should be provided.

Documents Required to apply for an Unsecured Business Loan

You have to submit a recent passport size photograph, photo identity proof, address proof, signature proof, income documents, bank statements, business continuity documents along with other documents like -

  • Customer letter for end use/the proposed end use of BIL funds
  • OD sanction letter, wherever DP/OD limit is not mentioned in the Bank statements
  • Professional qualification certificate for professionals
  • Partnership deed, in case of partnership firms
  • MOA/AOA along with certificate of incorporation, in case of companies
  • Form 3CB and 3CD or Form 3CC and 3CE, wherever applicable.

A business loan is an unsecured loan offered to meet financial requirements. You can use this loan to start a business, expand your existing business, manage inventory, etc. Since it is unsecured, you don't have to submit any collateral while applying for this loan. You can also get a personal loan quickly using Buddy Loan. It is one of the best third-party aggregators that offer loans for various categories. As it is easily accessible, it is considered the most convenient source of funds, especially during an emergency.

When can you choose a Personal Loan for Business?

You can always choose a business loan when there are the following requirements:

Start or Launch your new business:

As an entrepreneur, you might have always dreamed of bringing your business idea into a successful venture. But starting a business that stands out from your competitors requires a lot of financial resources. Therefore, you can take a personal loan for your business to handle all your overhead costs.

Expansion of your existing business:

When your business has good ROI and profits, you might choose to expand your business. Expansion is a huge process that requires heavy investment to launch your new product, expand your operations and productions, etc. Therefore, getting a business loan will help you expand your business successfully.

New equipment and machinery:

Sustaining a business is the most challenging part. With cut-throat competition, you must keep an eye on the current market trend, technology upgradation, and competitors' moves. You must keep your business updated by purchasing new equipment and machinery, which requires a lot of funds. Therefore, you can smoothly handle these expenses by taking a business loan.

Inventory management:

It tracks the stocks required from purchase to the sale of goods to the end-users. It includes managing raw materials, getting components from suppliers, warehousing the products, and reaching the finished product to the customers. Therefore, you can use a business loan to meet the expenses required for managing the inventory.

Human resource management:

When you start your business, you need talented employees to run the business successfully. The cost of hiring, training and mentoring can be pretty much for a new startup to handle. Therefore, a personal loan is the best solution to meet these expenses.

Marketing Strategy:

The marketing strategy plays a vital role in bringing profits to the business. It helps the business build a strong brand that attracts customers. Therefore, to curb the costs required for marketing strategy, you can always choose to apply for a business loan easily.

Eligibility

To get a business loan from a lender, you will have to check if you meet the required eligibility criteria mentioned by your lender. Here are the general eligibility criteria to get business loans:

  1. The loan can be taken by self-employed professionals, self-employed non-professionals, & entities.
  2. Self-employed professionals such as doctors, chartered accountants, company secretaries, architects, etc.
  3. Self-employed non-professionals such as traders, manufacturers, etc.
  4. Entities such as partnerships, limited liability partnerships, private limited companies, closely held limited companies,etc
  5. The business must have a minimum turnover of Rs.40 lakh annually
  6. Minimum 3 years of experience in the current business is required.
  7. Minimum 5 years of total business experience is required.
  8. The business must be making a profit for the last 2 years.
  9. Minimum Annual Income (ITR) of Rs.1.5 lakh p.a. is required.
  10. Applicants must be between the ages of 25 years to 55 years.
  11. The Income Tax returns for the last 1 year must be filed.

Documents required to apply for a Personal Loan For Business In order to apply for a business loan, you will have to submit the following documents-

  • PAN Card for Company, Firm or Individual.
  • Proof of ID such as copy of your Aadhar Card, Passport copy, Voter’s ID copy, driving license.
  • Proof of address such as copy of your Aadhar Card, Passport copy, Voter’s ID copy, driving license.
  • Bank statement (last 6 months)
  • Latest Income Tax Returns, balance sheet and P&L account for the last 2 years certified by a CA or audited.
  • Proof of continuation (ITR/Trade License/Establishment/Sales Tax Certificate)
  • Sole Proprietorship Declaration or certified copy of Partnership Deed.
  • Certified true copy of Memorandum and Articles of Association.

Lender Interest Rate Loan Amount Loan Tenure
HDFC Bank 11.90% p.a. to 21.35% p.a. (Rack interest rate) Rs.50,000 to Rs.50 lakh 12 months to 48 months
IIFL 11.75% p.a. to 32% p.a. Rs.1 lakh to Rs.50 lakh 12 months to 60 months
Fullerton India 17% p.a. to 21% p.a. (floating) Up to Rs.50 lakh 12 months to 48 months
DHFL 17% p.a. onwards Up to Rs.10 lakh (without collateral) Up to 5 years
Magma Fincorp 15% p.a. to 26% p.a. RUp to Rs.30 lakh Up to 36 months
Kotak Mahindra BankL As per the lender’s terms and conditions Rs.75 lakh Up to 48 months
Karnataka Bank 9.41% p.a. onwards Rs.1,500 lakh (will vary based on the type of scheme) Up to 120 months (will vary based on the type of scheme)
Tata Capital 19% p.a. onwards Rs.5 lakh to Rs.75 lakh 12 months to 36 months
SBI (Simplified Small Business Loan) As per the lender’s terms and conditions Rs.10 lakh to Rs.25 lakh Up to 60 months
Mahindra Finance (Unsecured Business Loans for SME) As per the lender’s terms and conditions Up to Rs.40 crore Up to 84 months (will vary based on the type of scheme)
Federal Bank (Asset Power Scheme – Business Loans for Professionals) 8.85% p.a. Up to Rs.7.5 crore Up to 120 months
Standard Chartered Bank (Business Installment Loan) 17.25% p.a. onwards Rs.10 lakh to Rs.75 lakh Up to 60 months

A business loan via Buddy Loan can be availed easily, as it is free of collaterals. Precisely, one need not worry about pledging their property to avail a loan.

100% Digital And Paperless Application Process

It is an extremely easy and quick process, to avail a business loan. Buddy Loan business loan has a feature integrated, to help ease the application process. The applicant can repay the loan through EMIs over the tenure from 6 months to 5 years. For a business loan via Buddy Loan, it is absolutely paper free process. For more information, you could contact your lender.

Collateral Free For Marriage Loan Online! Business loan via Buddy Loan

can be availed easily as there is no need for the applicant to submit any surety for applying the loan. However, it differs from organization to organization and hence we recommend to discuss this over before apply. Please note, that if the applicant has a record of better credit score, the chances of getting the loan at a lower interest is high. The process is easy and faster.

Flexible Loan Tenures

You can borrow as much as you need up to Rs. 15 Lakhs and the repay the loan amount through the EMI options over a tenure from 12 months to 5 years.

High Business Loan Approval Rates

Buddy Loan aggregator has disbursed instant business loans all over the country. Thanks to the hassle-free process and the wide pool of loan providers. Therefore, if you are looking for a quick business loan to expand the workforce, to rearrange the business structures and more, Buddy Loan is the best choice. To stand a chance for a better approval rate, collate the necessary documents and ensure they are up to date. With this, expect a business loan with minimal and hassle-free documentation. Enjoy your instant business loan with no more worries.

Disbursal Amount For Your Interest In Business Loan!

The minimum and maximum loan amount that you can opt for when applying for a business loan online is between the sum of Rs.10000 to Rs. 15 lakhs.

Best Interest Rates For You!

Buddy Loan business loan online disburses at minimum interest rates starting at 11.99% p.a. The better credit scores the applicant has, the applicant has higher chances to avail the loan with lower interest rates. Some banks charge fixed rates or variable rates (please double check with your particular lender).

Swift Business Loan Sanction

Your business loan is sanctioned within 48 hours of submission. The disbursement time is however less than the expected time. Applying for instantaneous business loan is easy and less time consuming, we connect as promised!

No Hidden Charges!

No prepayment charges, or any hidden fees to sort. There is no pre-booking of the loan that is assisted through third party situation. Buddy Loan doesn’t encourage any fake agreements to moderate the means between you and the lender. Get your business loan through good credit history!

Safety Of Your Business Loan

By law, the applicant’s information is held confidential with Buddy Loan. Buddy Loan aggregator has disbursed so many business loans instantly to the applicants who hold good credit history.

Here are the things that you have to keep in mind before you apply for a business loan:

Credit Score:

A high credit score shows a clean and consistent credit history. It indicates your repayment ability. As a result, you are a low-risk borrower. A score of above 750 is considered good and will help you get a loan at comparatively lower interest rates. If you want to check your credit score, you can use Buddy Score to get your instant credit report.

Loan Amount:

As personal loans are easily accessible, it is tempting to take more than you require. But if you do so, you have a higher chance of default, which will hurt your credit score. Therefore, you must take the loan amount only for what you need.

EMI:

Plan and calculate the EMI that you will be paying to plan your expenses accordingly.

Relationship with the lender:

You have a higher chance of getting your loan approved when you maintain a good relationship with your lender. The reason is that the lender will already know your current financial situation and your creditworthiness.

Interest rates:

Before applying for a personal loan, compare the interest rates provided by various lenders and choose the one that provides lower interest rates.

Other charges:

Be aware of other charges that lenders include, such as GST of 18% for banking services and processing fees of 0.5%, which will be deducted from the total loan amount.

If you want to apply for a business loan, you must first check and compare various loan options that suit your business requirements. So here are the steps to apply for an instant business loan by clicking ‘Business Loan’ on the homepage of the website.

  1. Step 1: Fill in the required details such as desired loan amount, employment status, annual gross sales or turnover, city of residence, years in current business, collateral type, and mobile number.
  2. Step 2: Check the box to agree on terms and then Click on ”Unlock Best Offers”
  3. Step 3: Further you have to mention the Company type, Nature of business, Type of industry, Gross Annual Profit, Bank Account, any existing EMI, Full name, Gender, Residence PIN code, PAN card, Date of Birth, and Email Address.
  4. Step 4: After submitting all your details, the representative of your bank will contact you to proceed with next loan formalities.
  5. Step 5: Once your application is approved, the loan amount will get disbursed to your mentioned bank account.

Bank/NBFCs Interest Rate
HDFC Bank 10.00% – 22.50% p.a.
FlexiLoans 1% per month onwards.
ZipLoan 1% – 1.5% per month (Flat ROI)
Axis Bank 14.25% – 18.50% p.a.
IDFC First Bank 14.50% onwards.
Kotak Mahindra Bank 16% – 19.99%
Fullerton Finance 17% – 21%
Bajaj Finserv 17% p.a. onwards
RBL Bank 17.50% – 25% p.a.
ICICI Bank 17% onwards.
Indifi Finance 1.5% per month onwards
Lendingkart Finance 1.5% – 2% per month
Tata Capital Finance 19% p.a. onwards
NeoGrowth Finance 19% – 24% p.a.
Hero FinCorp Up to 26% p.a.

Bank/NBFC IProcessing Fee* Pre-payment/Foreclosure Charges
SBI 1% of the sanctioned limit* Varies from loan-loan
HDFC Bank Up to 2.50% of the sanctioned loan amount Up to 4% of the outstanding amount
ICICI Bank Up to 2% of the sanctioned loan amount Charged as per T&Cs under sanction letter
Bajaj Finserv Up to 2% of the sanctioned loan amount Part-payment: 2% on the amount part-paid and 4% are foreclosure charges
Lendingkart Finance Up to 3% of the sanctioned loan amount Nil
RBL Bank Up to 3% of the sanctioned loan amount. No foreclosure permitted before repayment of 6
Tata Capital 1-2.5% of the sanctioned loan amount Foreclosure: 4.5% of Principal loan outstanding
IDFC First Bank Up to 2.5% of the sanctioned loan amount. Foreclosure: 5% of Principal loan outstanding

Credit score is calculated and generated by credit bureaus to estimate the credibility and probability of loan approval. And a good credit score that is above 750 assures you business loans at comparatively low-interest rates, as well as instant and hassle-free approvals. Moreover, credit scores can be improved and maintained by individuals, startups, small business owners even with no credit history or who are New to Credit by getting any loan or credit card. As interest rates for business loans vary from lender to lender, minimum credit score requirements may also differ.

What is the benefit of having a good credit score?

  • Helps the applicant avail the loan at lower interest rates.
  • Has better chances for loan approval
  • No more bragging rights.

How to Improve Your Credit Score to Get a Business Loan?

Here are tips you can follow to improve your credit score to get business loan at low-interest rates:

Check Your Credit Report

Reviewing your credit report helps you get insight into what is working in your favor or against you. Hence, check your information from major national credit bureaus such as Experian, Equifax, and TransUnion. Review the report at least once a year to rectify any potential errors that may harm your score.

Make Timely Repayments

Payment history accounts for most of the FICO score model (30%). Hence, it has a significant impact on your credit score. Therefore, make repayments within the stipulated time to improve your score significantly. You can also set reminders to make payments on time without fail.

Maintain your Credit Utilization to less than 30%

Credit Utilization Ratio (CUR) shows your credit usage to your credit limit. Hence, maintain your credit utilization to less than 30% by paying your credit balances fully. You can also request your lender to increase your credit limit to keep your credit utilization.

Limit your Hard Inquiries

When you apply for multiple loans from different lenders, each lender will check your credit score to assess your creditworthiness. As a result, it will generate a hard inquiry each time the lender checks your score, thereby harming your score. Hence, apply for a loan only once at a time to avoid unnecessary hard inquiries. Keep Your Old Accounts Open If you have old accounts that you don't use, do not close them. Maintaining your old accounts increases the length of your credit history. The longer your credit history, the more favorable you appear to the lenders as it shows consistent repayment history.

Here are the factors that affect the interest rates for your business loan:

Nature of Business

Lenders classify the business loan into 2 categories: Priority Sector and Non-Priority Sector. So loans that come under the Non-Priority Sector usually have a higher rate of interest compared to priority sector loans. Hence, the nature of your business determines the rate of interest on your business loans.

Business Existence

The longer your business is in operation, the better it is for you when you apply for a business loan. However, irrespective of the nature of your business, the business must be in operation for 2 years minimum. Therefore, with more years of existence in business, you will have a higher chance of getting business loans at lower interest rates.

Monthly Turnover

The monthly turnover of your business shows if the business is making a profit or loss. In short, it is a key factor in deciding your eligibility when you apply for a business loan. There may be times when the monthly turnover keeps fluctuating. So maintaining consistency is very crucial, as it helps the lender to decide the loan amount and repayment terms.

Credit Score

Credit score determines your creditworthiness and is based on various factors such as your payment history, length of the credit, credit inquiries, etc . If you have taken a loan in the past and repaid the dues on time, you will have a good credit score. And, if you have a high score (750 or above), it will benefit you when you apply for a loan. Moreover, a good credit score will help you get loans at lower interest rates and flexible tenure or repayment terms.

Collateral/Security

Collateral is a security that you pledge to the lender to avail a loan. Highly valuable collateral such as real estate, equipment, machinery, deposits or home equity gives security to the bank. Therefore, the lender will decide the loan amount after examining the collateral as the risk is low.

Type of Lender

The interest rates on business loans vary from one lender to another. And usually Banks offer lower interest rates comparatively, as offered by Non-Banking Financial Companies(NBFCs), Small Finance Banks (SFBs) or Micro Finance Institutions (MFIs).

Business Loan Balance Transfer (BLBT) is a facility in which you can transfer your existing business loan from one bank to another at comparatively lower interest rates online. The main purpose of balance transfers is to reduce EMIs and have a low interest rate for the outstanding balance of the loan amount.

  • Displays approx. amount of EMI to be incurred over the availed business loan
  • Saves time and helps in the efficient loan planning
  • Depicts a detailed overview of the availed loan through an amortization schedule
  • Depicts a detailed overview of the availed loan through an amortization schedule
  • Helps to plan finances for the future in a better way
  • Option to choose multiple schedules and EMI installment tenure as per your requirements

Several NBFCs and banks offer Startup loans for new businesses at an interest rate starting from 16% p.a. Here is the eligibility required to get a startup business loan, along with documents required for the same.

Eligibility Criteria for New Business (Startup) Loan in India

  • The applicant must have a well-planned business plan
  • The Startup has to be a sole proprietorship, partnership firm, private or public limited company or a limited liability partnership (LLP)
  • The applicant must have a credit score of 750 or above
  • Applicant with no previous loan defaults with any bank
  • Total turnover of the business should not be more than Rs. 25 crore

Documents Required

  • Fully filled application form with Passport-sized photographs
  • KYC documents of both applicant and co-applicants that include Passport, Aadhar card, Voter’s ID card, Driving License, PAN Card and Utility Bills (Telephone & Electricity Bills)
  • Self-drafted Business Plan
  • Last 12 months’ bank statement
  • Last 1-year ITR
  • Business Incorporation Certificate
  • Address Proof and PAN card
  • Any other document mentioned by the lender

Benefits of Getting Startup Business Loans from Banks/NBFCs

  • The new entrepreneurs will get tax relief for 3 years
  • Funds from venture capital are quite expensive for a startup as the investors of venture capital ask for 5 to 10 times of the return on their investment. Whereas, the rate of return for a loan is fixed at nominal interest rate.
  • It is simple to approach banks and NBFCs and request funds for your startup.
  • Banks and NBFCs have well-structured frameworks for processing the loan request of entrepreneurs. And the loan applications will be processed quickly compared to capitalist investors.
  • The profit (as well as the loss) of the business belongs only to the borrower. Borrowers are not answerable to the bank about the profit and loss of their businesses

How to Apply For A Startup Business Loan?

Here are the steps to apply for a business loan by visiting the online:

Step 1: Fill in all the required fields, such as desired loan amount, employment status, annual gross sales or turnover, city of residence, years in current business, collateral type, and mobile number.

Step 2: Check the box to agree on terms and Click on ”Unlock Best Offers”

Step 3: Further you have to mention the Company type, Nature of business, Type of industry, Gross Annual Profit, Bank Account, any existing EMI, Full name, Gender, Residence PIN code, PAN card, Date of Birth, and Email Address.

Step 4: After submitting all the required details, the bank’s representative will get in touch with you to proceed with loan formalities.

Step 5: Once the loan gets approved, your loan amount will be disbursed to your mentioned bank account.

SME loan is offered to Small and Medium Enterprise (SMEs) to cover any financial requirements and for business expansion purposes. SME loan is generally availed by start-up companies, small and medium enterprise, and business owners.

Interest Rates for SME Loans

Every bank and NBFC charge different interest rates for SMEs loans and it depends on different factors such as collateral, loan amount, repayment tenure, and applicant’s profile, creditworthiness and repayment capacity.

How to Apply for an SME Loan?

  1. Fill the loan application form with common details such as: Name of Company, Date of firm creation, Address of the firm, Operating address of the firm, E-mail address of the firm, Contact Details, Sector/Industry code, Permanent Account Number and GST No.
  2. Next, fill in the financial details related to your current debts and background such as: Bank A/C details, On-going Loans/Debts, Any financial service applied for, Brief about the security of the facility, Details of parent company/associates/group entities and All details relevant to profitability/liquidity-oriented mentioned in an annual accounting report
  3. Then, mention legal details necessary for processing such as: Documents related to registration of firm/shop/manufacturing unit, Registration certificate of the enterprise under MSME, Copy of sales tax-return filing documents, Copy of income tax-return filing documents and Drug license (if it is a pharmaceutical manufacturing/selling enterprise)

Eligibility Criteria

Banks offer SME loans after the firms qualify the below-mentioned eligibility criteria which may vary from bank to bank:

  • The business must be in existence for a minimum of 3 years
  • The SME should have seen profits in the last 2 years
  • The firm can be a manufacturing unit, a sole proprietorship firm, partnership firm, or a public/private enterprise

Documents Required

  • Recent Financial Statements of the firm
  • A list of owners/shareholders
  • A copy of identification of owners (passport, aadhar card, ration card, voter’s ID card)
  • A copy of the Memorandum of Understanding (MoU)
  • Photographs of owners/shareholders/partners
  • Income Tax Returns of last 3 years
  • Sales tax/GST related documents

Documents for Project-Oriented Businesses

  • Documents of land & building
  • Government approval of land conversion
  • Building blueprints by the architect
  • Cost quotation of machinery suppliers
  • Marketing plan
  • SSI registration
  • Power installation documents
  • Title deeds of assets and other collaterals
  • Descriptive project report
  • No Objection Certificate from department of pollution
  • List of plant and machinery installed within
  • Process flow of manufacturing systems

MSME loan is offered to MSMEs, individuals, startups, self-employed professionals and other entities to fulfill the financial requirements for business expansion. Banks and NBFCs offer maximum loan amount up to Rs. 2 crore (Collateral-free loans) with the tenure of repayment of up to 5 years. The interest rates for MSME loans may vary as per the requirements of your business and differ from lender to lender.

Features, Types, Fees & Charges- MSME Loans

MSME loans are mainly used for business expansion, starting a new business, meeting working capital requirements, enhancing cash flow, purchasing raw materials, goods, or stock, buying or upgrading equipment/machinery, paying off rent/salary, hiring, and training staff, etc.

Interest Rate Depends on the profile and business requirements of the applicant.
Loan Amount TThere is no minimum limit to borrow & you can borrow maximum up to Rs. 2 crores (in case of Unsecured Business Loan), which can exceed as per your business requirements.
Repayment Tenure Tenure starts from 12 months to 5 years, may exceed, as per the business requirements
Collateral/Security No collateral is required for unsecured business loans
Processing Fee Nil to 4% of the sanctioned loan amount
Foreclosure Charges From zero to 5% of the outstanding principal amount
Part-payment Charges From zero to 4% of the outstanding principal amount
Subsidy Offered by a few selected financial Institutions
Credit Facilities Working Capital Loan, Bill discounting, Overdraft, Term Loan, Cash Credit, Letter of Credit, Bill of Purchase, Merchant Cash Advance, Loans under Govt. Schemes, etc.

Eligibility Criteria

  • Must have a credit score of 750 or above
  • Minimum business operations of 1 year
  • The business must have a turnover of Min. Rs. 12 lakh for existing enterprises and varies from bank to bank.
  • Must have a good repayment history with stable financial health.
  • The business must not have any previous loan default with any financial institution

Eligible Entities that can apply for MSME loans:

  • Individuals, MSMEs, business owners, women entrepreneurs, self-employed professionals, and people falling under SC/ST/OBC category
  • Private or Public Limited Companies, Sole Proprietorships, Partnership Firms, and Limited Liability Partnerships engaged only in the trading, services, and manufacturing sectors

Documents Required

  • Duly filled and signed Application form with passport-sized photographs
  • KYC documents of both applicant and the co-applicants which includes Passport, Aadhar card, Voter’s ID card, Driving License, PAN Card, and Utility Bills (Telephone, Electricity Bills)
  • Address of your business and Vintage Proofs
  • Bank statements of last 6 months along with the required bank details
  • Business Establishment Certificate or Incorporation Letter
  • Proof of belonging to SC/ST or OBC category, if applicable
  • Any other document mentioned by the bank/NBFC

So here is how banks and non-banking financial companies (NBFCs) categorize the small-medium business segments:

MSME – Merged Criteria: Investment and Annual Turnover
Sector/Enterprise Type Small Enterprise Medium Enterprise
Manufacturing & Services Sector, Both Investment less than Rs. 10 crore Turnover up to Rs. 50 crore Investment less than Rs. 50 crore Turnover up to Rs. 250 crore

Many banks and NBFCs in India offer business loans to women to help them launch, run and expand their small businesses. The interest rates for business loans for women range between 7.35% to 7.60% while the tenure for repayment can go up to 5 years. Therefore, women can avail a loan amount of maximum up to Rs. 1 crore as loans to fund the requirements for their small businesses. Personal loans for women can help fullfil their business requirements which are usually similar to small business loans.

Top Banks Offering Small Business Loans to Women

Name of the Bank Name of the Scheme Interest Rate Loan Amount Repayment Tenure
Central Bank of India Cent Kalyani 7.35% to 7.60% Up to Rs.1 crore -
Punjab National Bank Mahila Udyam Nidhi Scheme Depends on Project cost Up to Rs.10 lakh Up to 5 years
Mudra Pradhan Mantri Mudra Yojana Linked to MCLR Up to Rs.10 lakh Up to 5 years
Bank of Baroda Shakti Scheme At the discretion of the bank Up to Rs.20 lakh At the discretion of the bank

Interest Rate For Business Loan For Women

Rate of Interest Margin Processing Fee Quantum of Loan
  • Loans up to Rs.10 lakh – 7.35%
  • Loans above Rs.10 lakh to Rs.1 crore – 7.60%
20% Nil Up to Rs.1 crore

Eligibility Criteria business loan for women

The basic eligibility to avail a small business loan for women is that they should either own the whole small enterprise or hold at least 51% of the stakes in the enterprise. The other eligibility requirements such as minimum age, income, etc., will vary from lender to lender.

Documents Required to apply Business Loans for Women

Application form Filled and duly signed after reading all the terms and conditions
KYC Documents Business entity proof, partnership deed, incorporation certificate, shops and establishment certificate, Articles of Association (AOA)
Financials
  • Projected turnover and current year performance
  • Tax audit reports, balance sheet, profit and loss report, VAT returns, audited and provisional financials, etc.
Bank Statements For the last 6 months
Photographs Passport-size photograph of applicant/co-applicants
PAN Card
  • Of partners/directors/proprietors/promoters
  • Of the business entity
Address Proof
  • Of the business entity
  • Of directors/promoters/partners/proprietors

How to apply for a Small Business Loans for Women?

Many banks and NBFCs provide small business loans for women to fulfill any financial requirements for their business. So you can easily apply for business loans online by visiting the official website. Here are the steps that you will have to follow:

  • Visit the official website of the bank or the NBFC you want to apply for the loan for.
  • Fill the application form with necessary details and submit the application form.
  • Upload the KYC documents required.
  • The bank will conduct a background check of the documents and if they are alright, the loan amount will be disbursed to your bank account within 3 business days

Benefits of Small Business Loans for Women

Easily accessible:

These days, many NBFCs and banks started offering small business loans for women to encourage women entrepreneurs to have a successful career. Also, these unsecured loans do not require any collateral which makes it easily accessible to avail for women.

Concession on interest rates:

Banks offer concession on interest rates for women who want to avail small business loans.

Easy repayments:

Women entrepreneurs who avail small business loans must repay the loan amount in Equated Monthly Instalments (EMIs). Moreover, lenders know that a business may go through many ups and downs which is why they offer easy and flexible repayment options.

Business growth: Small business loans

will encourage women entrepreneurs to kick start their own business or scale up their existing one. For any business to grow, it is essential to have adequate funds and resources. And when you are short of funds, a small business loan can help you handle such expenses hassle-free

Your businesses will require funding at various phases, for example, while starting on a new project, expanding operations, or recovering from losses. So, entrepreneurs must work out ways to make optimal use of their available resources in every possible way. But sometimes it may not be enough. In such situations, there are other options to fund your business and one of the best suitable options is a small business loan. Acquiring a small business loan from your own bank seems easy because many banks and NBFCs are realising the unique potential of small and micro-businesses (SMEs). Therefore, small business loans will help your business in many ways such as financing new equipment, increasing your inventory, and funding expansion plans. Not only that, it also offers other benefits which are explained below.

1. Flexibility

You can choose from different types of loans to fulfil any business requirements. Various government schemes such as CGTMSE and other schemes which offer business loans designed for MSEs for the purpose of starting, expanding, or upgrading the business. Moreover, Government schemes such as CGTMSE do not require any collateral or third-party guarantee. However, the guarantee cover is submitted to the financial institution by the trust itself.

2. Convenient Repayment

Business loans offer flexible repayment options because they understand the complexities involved in running a business and the business plans are designed accordingly. The lenders may offer repayment plans as per the cash flow in the business to avoid any difficulties in financial management. Also, borrowers can either increase or decrease the EMI as per the financial status of the business. They can also choose bullet payments for periodic repayment.

3. Low Rates of Interest

The rates of interest for business loans are not decided just on the basis of the loan amount. There are a number of factors to keep in mind such as tenure of the loan, viability of the business model, financial condition of the company, and credentials of the borrower. Other charges such as processing fee are nominal and are one-time expenses.

4. Easy Availability

Many banks, including NBFCs, offer small business loans without any collateral. This makes it easy for small business owners to avail such loans and sustain their ventures in a competitive market. Also, many banks provide EMI calculators and online applications making the process much easier than it used to be.

5. Grow Your Business

Finance, manpower, and technology are the essential resources of any business. Among all of them, finance is a major aspect that makes it possible for a business to make sure all the other needs are met. Thus, the required cash flow is highly vital for expanding your business as it can be used for various purposes. So in case of cash crunch, you can avail business loans to purchase required equipment to speed up your business. In addition, you will also have the freedom to use the money as per your preference. Therefore, it enables you to utilise the funds according to the needs and requirements of the business.

6. Tax Benefits

Small business loans help you to save some tax benefits as well. This is because there are sections of the Income Tax Act that state the percentage of profit utilised for repaying the loan amount is exempt from the tax.

Buddy loan is India's fastest-growing instant loan app built with the latest technology and features. It helps you experience a stress-free journey when applying for a loan to fulfill all your financial requirements. It is one of the biggest loan aggregators to help turn your dream into reality. You can download the app from Google Play Store and use this app to get an instant personal loan online for various requirements such as medical emergencies, travel to your dream vacation, making wedding plans, or growing your business. Being India's best personal loan app that offers instant loans from INR 10,000 to INR 15 lakhs with an interest rate starting from 11.99% per annum. It has flexible tenure for loan repayment, starting from 12 months to 5 years. And if you are looking for immediate funds, then this might be the right platform for you.

Some of the reasons why Buddy Loan is the best choice are;

  • The complete online process
  • Trustworthy loan providers
  • Low interest rates
  • transparency
  • Flexible repayment
  • User-friendly approach

Moreover, you can apply for an unsecured personal loan and access the loan amount as per your wish anytime, anywhere. The Buddy loan is the perfect one-stop solution for all of your financial worries. Here,you will be able to get a loan that is hassle-free and quick, and you might also get competitive repayment and rate of interest. Additionally, we compare what different banks can offer you and help you in making your final decision.

The following are some reasons why you should apply for personal loan for your business needs at Buddy Loan:

  1. Buddy Loan offers 24/7 customer service to all its customers. You can frequently ask questions from our customer service team as they are always available during business hours and will try to respond as quickly as possible.
  2. The process for approval of loans in Buddy Loan is fast and quick and it requires minimal documentation.
  3. TThe needs of our customers are our top priority. Our services are tailored to fit your needs. To provide you with an individualized experience, we handpick the best offers based on your profile.
  4. You can compare the different offers from various lenders to make the right choice. It is always good to find the best lender based on your eligibility requirements with our assistance.
  5. You can even choose the lender of your choice with the help of a personalised relationship lender from Buddy Loan.
  6. Buddy Loan even helps you to build up your credibility.
  7. The Buddy Loan proactive and user-friendly support team will help you cross the risk of confusion, debt risk, and defaults
  8. Buddy Loan gives transparency to you and 0 complexity in the loan process.
  9. We offer flexible repayment options with six months to 5 years of loan tenure.
  10. We have a fast and efficient customer service team that is ready to answer all your questions about loan eligibility, procedures, offers, documentation, and repayment options.
  11. From Buddy Loan, you can get a loan amount up to 15 lakhs only on your aadhaar and PAN card

In Buddy Loan, you can apply for a loan with the minimal documentation and the loan application process is easy as they involve these simple steps:

Step-1: First, you just need to download the Buddy Loan app from the google play store, you can even visit the website to compare and learn more about the features.

Step- 2: After you download the app fill all your details in the application form then the customer needs to fill the desired loan amount, tenures months and phone number. After that, you will get an option to apply for a loan.

Step- 3: After that, you will get an option to apply for a loan. Then you have to fill out the eligibility form, which includes filling in the following details:

  • Email Address
  • Employment Type
  • Company type
  • Your Industry type
  • Current Company Name
  • Enter Company address
  • Year of employment
  • Monthly in-hand salary
  • Mode of Salary
  • PAN Card details
  • Full Name (As per PAN Card)
  • Current Residence Pin code
  • Mobile Number

Step-4: After that, you will get an option to select from the multiple offer(s). Based on the information you provided above, you will be given a list of potential lenders. Depending on your profile, you may receive one or more offers. You are eligible to choose the lenders from the list.

Be sure to keep these points in mind when choosing a lender:

  • Interest rate offered
  • Loan amount
  • Loan Tenure

Step-5: Now, you can complete the application process. Hence, after submitting your application, our representative will follow up with you to cross-verify the details before sending the application to the lender.

Step- 6: Now you should patiently wait for the loan amount to be disbursed in your bank account.

Hope the above article would have given you a detailed guide on business loans available for different sectors with interest rates. A business loan is necessary to straighten the finances for small and big companies. A quick business loan reduces all the financial shortcomings to achieve all the career goals. Sometimes arranging immediate funds to close the annual taxes and other times for business equipment. To get all this with no collateral, avail the all new business loans at Buddy Loan. Business loan online is the most efficient and safe approach for better financial solutions.

FAQs

A business loan is an unsecured loan that is designed to cover various deficits in a small scale or big scale businesses without promising any collateral.

You can avail loan up to Rs 15 Lakhs through Buddy Loan online with business loan eligibility criteria. Once you submit the application you will be acknowledged well within 15 minutes.

Getting approval on your business loan online via Buddy loan, the application process is easy. Please keep the latest documents required by the organization. The eligibility criteria differ marginally with different organization.

However, most often the approval is mostly dependent on your credit history. You could also check refer: your eligibility criteria here

  • Human Resource
  • Building credit for the future
  • To purchase more inventory
  • A business opportunity that outweighs the potential debt
  • business needs fresh talent
  • Tax payment
  • To expand your physical location.

For more information, please refer to ELIGIBIITY CRITERIAS

And many more emergency purposes.

With Buddy Loan business loan, the applicant will be acknowledged within 15 minutes post submitting the application.

Buddy Loan aggregator has the easiest application process for business loan.

However, the minimum salary required for the availing a business loan is Rs. 20,000/-

It takes less than 48 hours for acknowledging the business loan. However, the applicant has a higher benefit of fastest loan approval over a good credit score.

To avail a business loan, you only need to meet the basic eligibility criteria.

  • You must be a citizen of India
  • Aged between 23 and 57 years
  • Employed with an MNC, public or private company, self-employed too.
  • As long as you meet the salary requirements as specified based on your city of residence, you qualify for a personal loan.

To avail a business loan, you will need to submit the following documents:

  • Proof of Identity: Passport / Driving License / Voters ID / PAN Card (anyone)
  • Proof of Residence: Leave and License Agreement / Utility Bill (not more than 3 months old) / Passport (anyone).
  • Proof of income: Latest 3 months Bank Statement (where salary/income is credited).

You can use the handy business loan online EMI Calculator to determine your monthly instalments.

No, Buddy Loan does not have any pre-payment charges whatsoever.

You can borrow up to Rs.15 lakhs without pledging any asset. And can repay the loan amount through a tenure from 6 months to 60 months.

Buddy loan aggregator offers business loans with a range of attractive benefits including:

  • Instant approval
  • Minimal documentation
  • Flexible tenures
  • No hidden charges

Complete the application form online and avail your business loan.

There is no limit for minimum loan amount whereas the maximum loan amount can go up to Rs. 1 crore for collateral-free loans.

You must keep a few things to keep in mind before applying for a start-up business loan which includes the interest rate, processing fees, service charges, penal charges, prepayment or foreclosure charges, etc.

Any credit score that is 750 or above is considered good.

The minimum annual turnover is defined by your lender and varies from bank to bank.

The pre-closure and part-payment charges vary from bank to bank. It may be zero in some Banks and may go up to 5% of the loan amount from others.

Yes, you can foreclose your business loan account by paying foreclosure charges to the respective bank or NBFC.

The repayment tenure of the SME loan ranges from 12 months to 5 years.

Interest rates offered by SMEs can be either fixed or floating depending on the bank and NBFC you choose.

No, you don't have to submit any collateral as SME loans are unsecured loans and third party guarantee is also not required.

Yes, you must have a good credit score above 750 when applying for MSME loans.

The minimum annual turnover limit is defined by the lender and it shall vary.

Yes, a machinery loan is also a type of business loan offered by banks and NBFCs to MSMEs and entrepreneurs.

The registration for MSME loan is free of cost.

Self-employed professionals, entrepreneurs, business owners, Micro-Small and Medium Enterprises (MSMEs), sole proprietorships, private and public can avail MSME loans.

Yes, previous year’s GST return is mandatory for existing MSME and salaried professionals who want to launch their new business(s).

The validity for a Provincial Registration Certificate (PRC) is 5 years.

Women applicants can visit the official website of the bank to apply for the loan online or can visit the bank to apply for a loan. Secondly, the applicants must check and compare different loan options and interest rates before applying.

Business loans for women are of many types such as: MSME loans, business loans, working capital loans, term loans, etc.