If you’re self-employed, raising funds traditionally from a bank can get tough. The options available are also limited. But don’t worry, nowadays online lenders such as FlexiLoans have made it pretty easy for self-employed individuals to opt for business loans, online. Not only have they started, but lots of NBFCs have also started offering loans to self-employed individuals. So take a look at all your available options –
Business loan for sole proprietors – These loans are generally up to Rs.50 lakhs and are collateral-free. But, you need to meet certain eligibility criteria in terms of turnover and history of business to be able to avail this loan. Usually lenders expect a turnover between Rs.10 lakh to Rs.40 lakh and require your business to have a profitability history of 1-2 years at least.
Overdraft facility –
Under such a facility a business is extended a credit up to a certain limit against their current account. From this account the borrower can withdraw how much ever he/she wants and they will be charged interest only on the utilized amount. These are usually between Rs.2 lakh to Rs.50 lakhs and the loan tenure ranges between 12-48 months.
Loan for professionals –
For professionals such as doctors, lawyers, CAs, architects, company secretaries etc. various lenders (banks, NBFCs, online lenders) have specially tailored loans to suit their needs. These loans usually range from Rs.50000 – Rs.50, lakh. However, the eligibility criteria for these loans vary depending on your profession and the lender.
Keeping that in mind, the general criteria is that the borrowing individual must have experience of practice of at least 3-5 years, post their education. They also expect a profit for the last 1-2 years and a minimal annual income of Rs.1 lakh per annum.
Government backed initiatives –
The government has made plenty of options available for self-employed people. For instance the MUDRA loan schemes are designed “to meet requirements of different sectors/business activities as well as business/entrepreneur segments.” They’re given to non-farmer enterprises in manufacturing, trading and services whose credit needs are below Rs.10 lakh. Usually these loans are collateral free if the loan is up to Rs.10 lakh.
If you’re applying for a self-employed business loan online the documents you would need are –
Note: Documentation may differ from lender to lender
Note: Features may differ from lender to lender
Note: These are the general procedure to apply for a loan, they may differ from lender to lender.