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Business Loan

Business Loan in India

A business loan is an unsecured loan that you will use to fulfil the immediate needs of your business growth. Small Business loans assist you in raising capital for your company to extend your current activities, increase demand, get your operations online, or purchase new equipment, among other things. Business finance's rapid infusion of cash allows you to make required transactions and payments on schedule, maintaining the seamless operation of your business.

Features of FlexiLoans Business Loan

  • Accessible and Convenient

Accessibility is the greatest quality of banks; it is also a key aspect since there would be a need for daily communication, savings deposits, and withdrawals. Through years of service with a particular bank, the client develops an interest in the institution. A positive track record enables the institution to be lenient with its clients.

  • Tax Benefits

Businesses that obtain a business loan may benefit from tax advantages since the ratio of income used to repay the loan is not taxed.

  • Online Application

There is no documentation to be provided, and no long application processes to complete. The application form is available online and needs only a few fields to be completed. Soft paper copies that are needed solely for application purposes must be submitted electronically with the form. It enables borrowers to complete loan documentation at any time, using a mobile device or a computer.

  • Repayments

Repayments on an online business loan are adjustable, which simplifies the process. A business loan can be obtained for a term of one to five years. This, however, may vary according to the lender.


Benefits of Taking a Business Loan from Flexiloans

  • Buying Inventory

One of the best things that small business owners can do with the money available through an online instant business loan is to buy inventory or improve their existing inventory. Using a loan amount for buying inventory is one good way of managing seasonal dips. It can also come as a major scope for the retailers to replenish their stock, or even try out a variety of new products.

  • Managing Daily Business Expenditures

If you want all the different things and procedures within your small business to keep running smoothly, you have to invest a lot of money and time into it. The money availed through unsecured business loans can be used for covering the daily expenditures associated with the smooth functioning of a business. This will further help in keeping the lights on.

  • Buying Required Equipment

A loan for businesses requires financing for their hard-hitting and heavy expenditures to procure new equipment. One of the best ways of using the amount availed through an MSME business loan in India is by making investments in different tools and equipment. This can help with business expansion and growth. Investing the money in the use of new and advanced technologies for making your business more appealing and instrumental for the targeted clients will give you an edge over your competitors as well.

  • Paying Off or Refinancing Debts

The cash obtained through a small business loan can even be used for debt consolidation. Paying off debts or refinancing the same early on in business can offer you a great impression amongst the creditors, and even amongst probable customers. So, if you want to build credibility, then make sure to use your funds the right way.

  • Business Promotion and Marketing

Last but not least, using available funds in business marketing will boost sales and bring in good revenues. If you want your business to grow, you must get brand-new customers for your products and services. Only getting customers will not work. Instead, you should have your focus on building a loyal customer base. This can best be done by using emails, events, social media, and paid media sources. This again requires the use of money, which is available to you in the form of a loan.


Business Loan Fees & Interest Rates

Business loan fees and interest rates can vary depending on the type of lender, the type of loan, and the loan terms. Here is a look at some of the fees and rates that may be associated with business loans.

Origination Fee The lender charges this fee for processing the loan. It is typically a percentage of the loan amount and can range from 1% to 5%
Discount Points Discount points are paid upfront by the borrower to lower the interest rate on loan. One point equals 1% of the loan amount.
Loan Servicing Fee The lender charges this monthly fee for maintaining the loan account. It can range from 0.025-0.075% per month.
Lender Interest Rate The interest rate charged by the lender will depend on some factors, including the borrower's credit score, the type of loan, and the loan terms. Rates can range from 5% to 30%.

Bank Fees:

 

Application Fee The bank charges a one-time fee for processing the loan application. They can range from Rs 2,000 to Rs 6,000.
Appraisal Fee The bank charges a one-time payment to appraise the property, ranging from Rs 2,000 to Rs 3,000.
Closing Costs These are the fees associated with closing the loan, including title insurance, attorney's fees, and recording fees. They can range from 2% to 5% of the purchase price.
Interest Rate The interest rate on a business loan will vary depending on the type of lender, the type of loan, and the loan terms. Rates can range from 5% to 30%.
Loan Term The loan term is the amount of time the borrower has to repay the loan. Loan terms can vary from 1 year to 25 years.
Collateral Requirements Some lenders may require collateral to approve a loan. Collateral can include real estate, vehicles, equipment, or inventory.

Types of Loan We Provide

FlexiLoans offers several business loans, each designed to meet a specific need. These include:

  • Term Loans:

    These loans are ideal for businesses that need a large sum of money for a particular purpose, such as expanding their operations. The Term loan is repaid in EMIs over some time, typically 2-5 years.

  • Loan against POS:

    This type of loan is perfect for businesses with many credit card sales. The loan is secured against the POS machine, and the company can use the loan amount for any purpose.

  • Line of Credit:

    This loan gives companies access to a pre-approved line of credit, which they can use when needed. This is perfect for companies that have irregular or unpredictable cash flow needs.

  • Vendor Financing:

    This loan allows businesses to finance their inventory by paying their suppliers in installments. This frees up working capital, which can be used for other purposes.

  • Collateral Free Loan:

    As the name suggests, this type of loan does not require collateral. This makes it ideal for businesses that do not have any physical assets to offer as security.

  • Overdraft credit:

    An overdraft limit account is a running account that allows deposits and withdrawals at any time up to the preset limit. The bank charges interest at a set rate on the borrower's overdraft amount.


How to Calculate Business Loan EMI?

EMI stands for Equated Monthly Instalment. It is the amount that you will need to pay every month to repay your business loan. You can use a business loan EMI calculator to calculate your EMIs. To do so, you will need to input the following information:

  1. The loan amount

  2. The interest rate

  3. The tenure of the loan

Example :

To calculate business loan EMI, you first need to know the interest rate, loan amount, and tenure. Then, you can use online EMI calculators to calculate your business loan EMI easily.

The formula for calculating EMI:

EMI = P x r x (1+r)^n/((1+r)^n-1)

Here,

P = Loan amount

r = Interest rate per month

n = Loan tenure in months

Using the above formula, you can calculate Business Loan EMI.

Assuming you have taken an Rs. 1 lakh loan at an annual interest rate of 12%, for a tenure of 2 years, your monthly business loan EMI will be:

EMI = Rs. 1,00,000 x 12% x (1+12%)^24/((1+12%)^24-1)

= Rs. 4,976.48

To calculate your business loan EMI using an online calculator, you need to enter the loan amount, interest rate, and tenure. Then, the calculator will do the rest of the calculations for you and give you the results in seconds. This is an expeditious and easy way to calculate your business loan EMI.


Basic Eligibility Criteria

A business loan provider in India can also lend you money without any security. It mainly depends on the lender. There are some business loan eligibility criteria that businesses need to fulfill for getting the loan amount. These criteria are listed below:

  • An individual must be 21 years of age when applying for the loan, and not more than 65.
  • Small Business loans are available to individual corporations, sole proprietors, and private companies involved in trading, production, or services.
  • The applicant must have worked in the industry for three years, and have at least five years of experience.
  • Offers business loans to those businesses that have been running for at least a year and have monthly total sales of at least ₹2,00,000.
  • Business loans online can be applied in India if the company has been in service for more than 3 years.
  • We would also ensure that there are no errors in previous accounts, and as such the company is tax compliant.

How to apply for business loans?

Step 1: Fill out the online form-

This is the application form that asks for basic requirements such as the borrower’s details and the reason for the loan.

Step 2: Upload Documents-

These are documents such as PAN cards, Aadhar cards, IT returns, and Bank statements. Many websites also offer the option of generating a credit score through the help of these documents.

Step 3: Get Approved!

Once you have submitted all the documents and the online application form, the lenders will go through them and in a few minutes approve your application if the documentation is in place! To apply for business loans and the types of business loans that suit your needs.


Special Loan Provided by Flexiloans

  • Self Employed Business loan

As a business owner, you can go through different stages of expansion and development. Typically, both of these prospects need the right financing at the right time. Obtaining versatile, unsecured funding is regarded as the easiest and safer course of action. Self-employed business loans are the ideal financial tool for addressing short-term financing and working capital requirements. If it's for capital needs or other capital expenses necessary to keep the company going, we have the solutions and industry expertise to assist you in fulfilling your funding needs.

FlexiLoans India's innovative finance strategies are tailored to the specific needs of businesses across sectors. With our business loan, you can concentrate on growing your business while arranging and managing your financial needs.

  • Loan for Furniture Business

Furniture stores need a substantial initial cost as well as major production expenditures to operate efficiently. To run a profitable furniture store, you'll need reliable resources to cover the high overhead costs. The positive news is that there are several solutions available for furniture company owners seeking a loan for furniture business. So, with FlexiLoans you can apply for a business loan in India without security as these loans will be collateral-free.

We all need transportation to get around. Every Indian dreams of owning both a two-wheeler and a four-wheeler. With the assistance of a business loan, you will benefit handsomely from this dream. If you own an automotive company and need additional funds to renovate your showroom or add another vehicle manufacturing brand to your showroom, a business loan from FlexiLoans will assist you. With our business loan, you will immediately receive the requisite principal sum. You can invest in your company in any manner you wish; there are no restrictions.

  • GST Business Loan

Today, several private and public sector banks, government agencies, and financial institutions provide loans to small and medium-sized businesses. The GST Business Loan is a popular loan option.

A GST business loan is a term loan of up to ₹ 1 crore secured against micro, small, and medium-sized enterprises' GST returns. This ensures that MSMEs can obtain support for their working capital needs simply by submitting their GST returns.

  • E-commerce Business Loan

In India, online shopping has exploded in popularity. The country's rapid growth in e-commerce has drawn a number of the country's biggest domestic and foreign firms to the market. This has resulted in a substantial rise in competition for independent online merchants. They must now invest regularly in their online retail company to stay ahead of the market and retain new customers.

E-commerce Loan In India is one of the most effective ways for online companies to meet this ongoing funding need. We will assist you in locating the right business loan online in the fastest and most comfortable manner possible to assist you in growing your business.


Documents Required for Business Loan

Personal KYC PAN card
Residential Address Proof (Any One) Rent Agreement | Driving License | Voter's ID | Ration Card | Passport | Aadhar Card
Banking Last 6 months current account bank statements
Business KYC (Any One) GST Registration Certificate | Shops & Establishment Certificate | Business PAN Card

Dos and Don'ts of Business Loans

When availing of a business loan, one must keep confident do's and don'ts in mind to ensure a safe and smooth financial experience. These are as follows:

DOs:

1. Do compare different business loan offers before availing of one.

2. Do check the eligibility criteria for the loan beforehand.

3. Calculate the EMIs you will have to pay using a business loan EMI calculator to ensure that you can comfortably afford them.

4. Create a budget and stick to it to make the most efficient use of the loan.

DON'Ts:

1. Don't avail business loan for personal expenses.

2. Don't forget to read the terms and conditions of the loan agreement carefully before signing it.

3. Don't default on your EMIs, as this will damage your credit score and make it difficult to get future loans.

4. Don't take more money than you need, as this will increase your EMIs without providing additional benefits.


Business loan News

The micro, small, and medium-sized enterprise (MSME) sector drives the Indian economy.

The industry is renowned for creating the most jobs in India and generates close to 30% of the country's GDP. The Government of India offers several loan programmes to enhance the MSME sector because of the sector's significance and the part it plays in the country's development.

Government-backed business loans provide MSMEs with the proper financial support to sustain ongoing operations and promote growth. Additionally, the Indian government's start-up company loan offers simple access to cash to turn viable business ideas into successful companies.

  1. MSME Loan in 59 Minutes

    The Government of India developed a rapid business loan gateway through this programme, also known as PSB Loan in 59 Minutes, for those who need to expand their current businesses.

  2. Pradhan Mantri MUDRA Yojana (PMMY)

    Micro Units Development and Refinance Agency Ltd. are known as MUDRA. Under the Pradhan Mantri MUDRA Yojana initiative, MUDRA offers help refinancing banks and NBFCs for lending to micro units with credit requirements up to INR 10 lakhs. To represent the stage of growth and development, MUDRA split the loan under PMMY into three categories: "Shishu," "Kishore," and "Tarun."

  3. Credit Guarantee Fund Scheme for Micro and Small Enterprises (CGFMSE)

    It is a government business loan programme made available to the MSME sector by the Government of India (the "GOI"). It comprises both new and established businesses. To administer the CGFMSE plan, the Ministry of MSMEs and Small Industries Development Bank of India (SIDBI) created a Trust called the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE). This funding programme gives qualified women a particular advantage and gives MSMEs access to loans up to INR 200 lakhs.

  4. National Small Industries Corporation (NSIC)

    NSIC is an MSMEs-classified Indian Government firm with ISO certification. By offering integrated support services, including finance, marketing, technology, and other related services across the country, it is trying to help and encourage the growth of MSMEs.

  5. Credit Support Scheme

    Through this programme, NSIC offers MSMEs financing for purchasing raw materials, marketing initiatives, and funding through syndication with banks.

  6. Credit Linked Capital Subsidy Scheme (CLCSS)

    The Ministry of MSMEs created the CLCSS, an innovative loan programme, with the primary goal of assisting MSMEs in upgrading their technology, particularly in rural and semi-urban regions. Businesses may choose to get a 15% subsidy under this programme on qualified machinery purchases. However, a restriction limits the support to a maximum of INR 1 crore.


Frequently asked questions

What are the purposes for which I can get a loan via FlexiLoans?

FlexiLoans is here to provide you financial access for your business funding needs. You have to undergo simple and transparent Credit Evaluation, basic documentation before we disburse the loan. You may get loans via FlexiLoans for:
  • Expanding your business
  • Servicing regular working capital needs
  • Managing seasonal working capital requirements
  • Manage short term cash flow gaps

Why should I avail loan via FlexiLoans?

Quick credit assessment ensures fast disbursal of loan at best rates and flexible terms, thus providing financial access at a click! Our business is to help you grow your business.

What documents are required to apply for a loan?

KYC document

  • - Pan card

Proof of residential address (any one)

  • - Rent Agreement
  • - Driving License
  • - Voter's ID
  • - Ration Card
  • - Passport

Banking

  • - Last 6 months of bank statement of current account

Business KYC (any one)

  • - GST Registration Certificate
  • - Shop Establishment Certificate

Financial documents (For loans greater than 20 Lakhs)

  • - 2 years Audited financials
  • - Last 2yrs ITR
  • - GST Returns of 6 months

Are there any charges other than interest rate that I have to pay to avail the loan?

We may charge processing fee to facilitate the loan towards legal and documentation charges. You may be charged penal charges for late or irregular payment behavior.

Where to apply for a small business loan?

To apply for a business loan, click on the link here. Fill the loan application and upload the documents online our team will then contact you regarding the loan.

The maximum amount of loan that I can take?

You can get an unsecured business loan up to ₹1 crore.

What credit score is required to qualify for quick business loans?

A credit score of 750 or above is regarded favourably by financial organisations. Lenders will prioritise borrowers with credit scores close to 900, which is the maximum allowed.

How should I pick the best loan repayment period?

If you take out a short-term loan, the payback period should ideally not be longer than 12 months. It could, however, go up to the required loan amount. Depending on the loan amount, which may exceed what is necessary for the business, a maximum payback period of up to five years may be selected.

What effect does the GST have on financing for startup businesses?

An essential factor in obtaining business loans is GST, as the higher the business volume, the more GST is paid. Banks may more easily rely on applicants or borrowers who pay their GST.

What amount of turnover is necessary to qualify for a loan to launch a business?

The lender determines the minimum yearly turnover requirements, which differ from bank to bank.

What do business loan pre-closure and part-prepayment fees entail?

Lenders have different pre-closure and part-payment fees. Some banks charge nothing, while others charge more than 5% of the loan amount. Make sure you verify this with your lender.

How can I accelerate the loan approval process?

Even though the approval procedure for our loans is quicker than that of banks, we strongly advise that you provide accurate documentation and carefully follow the online application instructions to avoid delays.

Can I manage my working capital with a business loan?

Yes, business loans are all-in-one solutions that may be utilised for various short-term tasks, including managing working capital, inventory, and equipment purchases.

Quick credit assessment ensures fast disbursal of loan at best rates and flexible terms, thus providing financial access at a click! Our business is to help you grow your business.

KYC document

  • - Pan card

Proof of residential address (any one)

  • - Rent Agreement
  • - Driving License
  • - Voter's ID
  • - Ration Card
  • - Passport

Banking

  • - Last 6 months of bank statement of current account

Business KYC (any one)

  • - GST Registration Certificate
  • - Shop Establishment Certificate

Financial documents (For loans greater than 20 Lakhs)

  • - 2 years Audited financials
  • - Last 2yrs ITR
  • - GST Returns of 6 months

We may charge processing fee to facilitate the loan towards legal and documentation charges.

To apply for a business loan, click on the link here. Fill the loan application and upload the documents online our team will then contact you regarding the loan.

You can get an unsecured business loan up to ₹1 crore.