Aadhaar Card’s Role in Securing Business Loans Faster

The government of India issues a distinct identification number called an Aadhaar card to every country resident. This number consists of 12 digits. It is linked to your biometric and demographic data, such as your name, date of birth, address, gender, photograph, fingerprints, and iris scan. It serves as identity and address proof for various purposes, such as opening bank accounts, filing taxes, availing subsidies, and more.

But an Aadhaar card is not just a personal document. It can also help you in your business endeavours, especially if you are looking for a business loan or want to enhance your business functioning. Let’s find out how.

How Aadhaar Card Can Help Secure Business Loans Faster

If you are a business owner who needs a loan to start, expand, or sustain your venture, you might be aware of the challenges and difficulties involved in the process. You might have to deal with paperwork, documentation, verification, collateral, and other requirements that can take a lot of time and effort.

However, with an Aadhaar card, you can simplify and speed up the process of applying for a business loan. All you need to do is follow these steps:

• Visit the website or app of the lender of your choice and fill out the online Aadhar loan application form with your personal and business details.
• Upload a scanned copy of your Aadhaar card and other required documents, such as your PAN card, bank statements, income tax returns, etc.
• Verify your identity and address by sharing the OTP sent to your registered contact number linked with your UID card.
• Sign the loan agreement electronically using your Aadhaar e-signature.
• Receive the borrowing amount in your bank account within a few hours or days, depending on the lender’s policy.

By using an Aadhaar card, you can enjoy the following advantages when applying for mobile finance on Aadhar card:

• You do not need to provide multiple identity proofs or collateral, as an Aadhaar card serves as valid and sufficient evidence of your identity and address.
• You can get a quick and hassle-free verification and approval of your loan application, as the Aadhaar card enables instant and secure authentication of your data and documents.
• You can access various loan schemes and options from different lenders, such as banks, NBFCs, FinTech companies, etc., who accept an Aadhaar card as a valid document for business loans.
• You can receive lower interest rates and flexible repayment terms, as an Aadhaar card can help you improve your credit score and eligibility for business loan.

Now, if you are wondering how to get a loan on Aadhar card, the next section will assist you on this.

Tips to Get Instant Loan Using Aadhar Card

Getting a loan on Aadhaar card is not very difficult, but you can lift your chances of getting approved and getting a better deal by following these tips:

• Keep a healthy credit score: Your credit score measures your creditworthiness and repayment history. It can affect your eligibility and interest rate for the loan through Aadhar card. A higher credit score means a lower risk for the lender and a lower interest rate for you. You can lift your credit score by settling your bills and EMIs on time, avoiding defaults and late payments, and keeping your credit utilisation ratio low.
• Choose the right lender: Many lenders, such as banks, NBFCs, FinTech companies, etc., offer Aadhaar card loans. You should compare the features, terms, and conditions of different lenders and choose the one that suits your needs and preferences. Check reviews and ratings of the lenders online to get an idea of their reputation and customer service.
• Compare interest rates and other charges: The interest rate is not the only factor that determines the cost of the Aadhar-based loan. Consider other costs, such as processing fees, prepayment penalties, late payment fees, etc., that can add to the overall cost of the loan. You should compare the interest rates and other charges of different lenders and choose the one that offers the lowest effective loan cost.
• Negotiate the terms: Try to negotiate the loan against Aadhar card terms with the lender, such as the loan amount, tenure, interest rate, etc., to get a better deal. You can use your credit score, business performance, relationship with the lender, etc., as leverage to bargain for a lower interest rate or a higher amount on a loan with Aadhar card.

How Do Aadhaar and Udyog Aadhaar Benefit Your SME?

• If you have a Udyog Aadhaar, you can apply for loans under the CGTMSE scheme, which provides collateral-free loans up to Rs. 2 crore at concessional interest rates. You can also avail of loans under the Prime Minister’s Employment Generation Programme (PMEGP), which provides loans up to Rs. 25 lahks for manufacturing units and up to Rs. 10 lahks for service units, with a 15% to 35% subsidy.
• If you have a Udyog Aadhaar, you can apply for financial assistance under the International Cooperation Scheme, which provides reimbursement of 75% to 95% of the airfare and space rent for participating in international trade fairs and exhibitions. You can also avail of financial support under the Market Development Assistance Scheme, which reimburses 75% of the airfare and 50% of the space rent for participating in overseas trade fairs and exhibitions.
• If you have a Udyog Aadhaar, you can apply for various subsidies offered by the government, such as the CLCSS, which provides a subsidy of 15% on the purchase of plant and machinery up to Rs. 1 crore. You can also avail of subsidies under the Technology Upgradation Fund Scheme (TUFS), which provides a 10% to 30% subsidy on the cost of technology upgrades for textile and jute sectors.
• If you have an Aadhaar, you can apply for micro-business loans under the Pradhan Mantri Mudra Yojana (PMMY), which provides up to Rs. 10 lakh without any collateral or guarantee. You can also apply for other related schemes, such as the Stand Up India Scheme, which provides loans up to Rs. 1 crore for women and SC/ST entrepreneurs, and the Startup India Scheme, which offers tax exemptions, patent fee waivers, and other incentives for startups.
• If you have a Udyog Aadhaar, you can file a complaint against any buyer who delays the payment for your goods or services beyond 45 days under the Micro, Small, and Medium Enterprises Development (MSMED) Act, 2006. The Act provides for establishing Micro and Small Enterprises Facilitation Councils (MSEFCs) at the state and district levels, which can help you recover your dues within 90 days, with an interest of 3 times the bank rate.
• If you have a Udyog Aadhaar, you can approach the MSEFCs to settle any dispute arising from your business transactions, such as quality, delivery, payment, etc. The MSEFCs can help you resolve disputes through conciliation and arbitration within 90 days without any court fees or legal expenses.
• If you have a Udyog Aadhaar, you can enjoy a waiver of stamp duty and registration fees for purchasing or leasing land or building for your business in some states. This can help you save significant money and hassle in setting up your business premises.
• If you have a Udyog Aadhaar, you can claim various exemptions and deductions under the Income Tax Act of 1961, such as deducting 100% of the profits for the first three years and 50% for the next two years for startups. You can also claim exemptions and deductions under the GST Act 2017, such as the exemption from GST registration for businesses with an annual turnover of less than Rs. 40 lakh.
• If you have a Udyog Aadhaar, you can apply for a subsidy of 50% on the cost of patent registration under the Patent Registration Scheme. This can help you protect your intellectual property rights and enhance your competitiveness in the market.
• If you have a Udyog Aadhaar, you can avail of discounts on your electricity bills, ranging from 10% to 50%, depending on the state and your business category. This can help you reduce your operational costs and increase your profitability.
• If you have a Udyog Aadhaar, you can apply for a reimbursement of 75% of the payment made for obtaining ISO 9000/ISO 14001/HACCP certifications, up to Rs. 75,000, under the ISO 9000/ISO 14001/H

 Conclusion

Aadhaar card for a business loan is an excellent way for small businesses and entrepreneurs who want to get a loan without any collateral or guarantor. It offers many benefits, including minimal documentation, quick approval, flexible amount and tenure, competitive interest rates, and easy eligibility. You can also follow some guidelines to improve your chances of getting the loan and a better deal. An Aadhaar card business loan can help you quickly and conveniently fulfill your business goals and dreams.

FAQ’s

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