There are many people in our country who want to start their own business but due to not having enough money they are unable to start the business. Actually , capital is the most important thing to start any kind of business or to expand the business going on earlier. However, for the purpose of starting their business, financial assistance is being provided by the government to the people through schemes. Even now the process of giving business loan by banks has become much easier than before.
In such a situation, if you want to start your business, but you do not have enough money, then you can take a business loan for this. Here you are being given complete information about how to get a loan for business. Along with this , the documents required to take the loan, the interest rate and how to apply are being told.
What is Business Loan?
Business loan simply means loan related to business. Business loan is mainly taken for fulfilling business purposes. Like what type of shop, distributorship or any other type of business you want to start or you already have a business running and you want to increase your business on a large scale but you are short of money. So you can fulfill this need of this money by taking a loan.
Business loan or business loan is the amount taken in the form of loan from bank or any other financial institution for business. Since you get this amount as a kind of loan, which you have to pay back the principal along with interest in a stipulated time.
Important information related to Business loan
We all know that no bank or financial institution provides loan easily. Before giving the loan, that financial institution verifies whether you are capable or not to return the loan amount. Therefore, before taking the loan, you should select the appropriate bank and apply for the loan according to your eligibility so that you do not have to rush to get the loan.
How to get loan for business
With the aim of promoting employment, many types of schemes are being run by the government, through these schemes you can get loans. Apart from this, commercial loans are provided by government and non-government banks. However, business loans should always be taken keeping in mind the requirements of the business. Business or business loans are divided on the basis of 3 factors, which are as follows:
- Business loan under government schemes.
- Loan from government or non-government banks i.e. bank loan.
- Business Loan Scheme for Women Entrepreneurs.
1. Business Loans under Government Schemes
For the last few years, the government is providing money to the people to start their own business through various types of government schemes. In which money is being given to people for business through MSME ie Micro, Small and Medium Enterprises. The schemes launched by it especially to promote small business and new startups are as follows
- MUDRA Loan Scheme
- Stand Up India Scheme
- Coir Udyami Yojana
- Bank Credit Facilitation Scheme
- NABARD (National Bank for Agriculture and Rural Development)
2. Loans From Government or Non-Government Banks
At present, business loans are being given by government and non-government banks which are as follows
- Term Loan
- Working Capital Loan
- Start-up Loan
- Invoice Financing
- Equipment Financing
- Overdraft
3. Business Loan Scheme for Women Entrepreneurs
Business loans are also given by the government and banks for women entrepreneurs. The bank offers small business loans to women running successful business. Financial Institutions like Banks and NBFCs have launched many types of schemes for women businessmen, which are as follows
- St. Kalyani Scheme
- Stree Shakti Package for Women Entrepreneurs
- Dena Shakti Scheme
- Udyogini Scheme
- Women Enterprise Fund Scheme
Eligibility for Business Loan
You can get business loan through bank and government schemes. However, some eligibility has been prescribed according to the rules for taking loan through both the mediums, which are as follows
- The applicant must be a citizen of India
- There should be an action plan related to starting a business.
- Applicant’s age must be between 18 years to 65 years .
- If you have any type of business already running, then your business should be about 3 years old.
- You must not have been declared a defaulter by any bank or financial institution.
Documents Required for Business Loan
- Proof of Identity : Voter ID , Aadhar Card , Driving License , Passport
- Proof of Residence: Ration Card , Aadhar Card, Passport, Electricity Bill , Telephone Bill
- Proof of Income: Bank account details of last 2 years
- Financial Documents: Income Tax Return (for last 2 years), Profit and Loss statement for last 2 years or Balance sheet.
- Business Ownership: If your business is operated in partnership, then partnership deed for business loan.
Business Loan Interest Rate
If you take a loan under any government scheme, then the interest rate is very low and this interest rate varies according to all the schemes. Apart from this, if you take a loan from the bank, then the interest rate of private banks is slightly higher than that of government banks.
The most important thing is that even before taking a business loan, installments are fixed according to the interest rate according to the amount, that is, you are told this interest rate and the interest rate remains the same till the loan is repaid. Generally, the interest rate for business loans can start from 13 per cent and go up to 48 per cent.
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