Small Business Loan

Small businesses in India are considered as the lifeline of the business industry of the nation. There are many micro, small and medium level businesses working towards making profit in India. To make huge conglomerate one has to start by taking small footsteps i.e. to create a small business. As more and more people getting involved in small business, the increase for funding needs is seen across India. Small businesses require various amounts of funds for their various business related needs. For that, they usually opt for a business loan. There are various types of business loans in Mumbai offered by banks and NBFCs for small businesses. Many times businessmen find themselves in need of credit to expand or fund their business for multiple reasons. They need the funds to buy some equipment, working capital gap, payment to creditors, pay off business dues, pay employee's salary, to expand etc. Businessmen can't put the funds in line from their personal savings. Thus they opt for business loans in Mumbai. The business loan works as the perfect financial aid for such situations. Taking a business loan is always a safe and easy way to tackle your business related financial needs. Many banks and NBFCs are used to give bigger amount for longer tenures for businesses which are earning profits in huge amount and have been there for a long period of time. Thus many believe that small businesses do not get loan easily. But now-a-days banks and NBFCs are giving away small amount loans with shorter tenure specifically to fulfill the needs of small businesses in Mumbai. These small business loans get quick disbursements and require minimum documents.

What are the Features and Benefits of a Small Business Loan?


Loan amount
Banks and NBFCs offer a minimum of Rs. 5,00,000 to maximum of Rs. 50,00,000 for small businesses. This amount is very low in terms of business loans; but perfect for the requirements of a small business. The amount is given as per the needs of the borrower's.

Customized loan plans
Every business and its requirements are different from each other. Banks and NBFCs understand this and thus they have come up with customized loan plans. They offer the loan plans as per the businesses requirements, credit history, resources, objective and the overall nature of the business.

Extra charges and fees
Banks and NBFCs understand the financial crunch the borrower/s must be having. Thus they charge very minimum processing fee which ranges from 0.50% to 2% + tax*. Also many banks and NBFCs do not charges prepayment charges allowing the borrower/s to pay off the loan whenever he/she/they can.

Short tenures
As the loan amount approved here is small, the tenure also falls shorter. Banks and NBFCs usually offer 1 to 3 years of tenure for short term business loan for smaller enterprises. This tenure is very flexible thus helping borrower/s to pay off the loan easily.

Quick approval and disbursement:
Many times small businesses require the funds sooner than later. Banks and NBFCs, keeping this thing in mind, approve the loan as quick as within 72 hours. The money disburses in the borrower's account immediately. The borrower's just has to present the correct documents at once.

No mortgage
As the loan amount approved here is small, the tenure also falls shorter. Banks and NBFCs usually offer 1 to 3 years of tenure for short term business loan for smaller enterprises. This tenure is very flexible thus helping borrower's to pay off the loan easily.

Uncomplicated eligibility criteria

Each bank and NBFC has different criteria to approve a short term business loan for smaller enterprises. They change as per their policies. They require s strong CIBIL score along with a strong and sustainable business proof. Also all the business related documents should be audited with ITR paid on time.

Minimum documentation
To get a short term business loan for smaller enterprises, the borrower/s has to submit minimum documents. These include ITR details; VAT returns; KYC details of applicant/s and organization; banks statements and details of current loan obligations.

What are the Documents Required to avail a Business Loan?


1. Neatly signed and filled loan against property application form.
2. Passport-size photographs.
3. Identity and signature proof - Passport, Pan card, Driving License, Voter ID card, Aadhar card, employee identity card in case of government employees.
4. Address Proof - Bank statement, Rent Agreement, Voter ID card, Ration card, Passport, Driving License, telephone/electricity/water/credit card bill or Property tax.
5. Age Proof - Voter ID card, Secondary school leaving certificate (class 10), birth certificate, Passport, Aadhar Card, pension payment order or receipt of LIC policy.
6. PAN Cards' For Company /Firm/ individual.
7. Copy of details of all existing loans.
8. Bank statements of last 6 months from application date.9. Business proof (registration of business)
9. Business proof (registration of business)
10. Copy of ITR/Assessment Orders of 3 years
11. Copy of challans proving that Advance Income Tax has been paid.
12. Balance sheet and Profit & Loss details of business from last 2 years. These details should be certified by CA.
13. Proof of continuation which will include ITR, trade license, establishment and sales tax certificate

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