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Assessing Business Loan Eligibility

by Olufisayo
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Present-Day India is brimming with entrepreneurs who are willing to put in all that it takes to kick-start businesses that are not only capable of generating returns but can also change the face of the society. While these passionate individuals have some incredibly wonderful ideas, many of them lack the basic resource for establishing and running an entrepreneurial venture successfully – Money. Thankfully for them, there is a readily available source of funding for managing the operating expenses of a business or expanding or diversifying it, which is none other than a Business Loan.

What is a Business Loan?

A Business Loan is essentially a credit offered by a bank or any financial institution aimed at helping the business owner meet their funding needs. Depending on the type of business, and its requirements, a Business Loan can be used for a wide array of purposes including:

  • Purchase of a fixed asset
  • Fulfilling working capital needs
  • Purchase and management of inventory
  • Expansion of business operations
  • Business diversification
  • Partnerships & acquisitions

business-loan

Who Can Avail a Business Loan?

Ideally, all forms of businesses including sole proprietorship firms, partnership firms,  private or public limited companies are eligible for a Business Loan, provided the age of the borrower is between 21 to 65 years of age, and that they are able to furnish the relevant documents.

In case of a Business Loan, the lender may be a Bank or an NBFC, with varying limits on the loan amount. Depending on these factors, all leading Business Loan providers have different eligibility criteria.

       

Let us take a quick look at Business Loan eligibility criteria listed by the top Indian lenders:

SBI Simplified Small Business Loan Eligibility

Under SBI Simplified Small Business Loan you can expect funding of up to 10 times of the average monthly balance in your current account in the past year. The minimum loan amount offered is Rs. 10 lakh, and the maximum is Rs. 25 lakh.

In order to qualify for this loan, following conditions must be met:

  • The business should have been in existence for at least 5 years in the same locality.
  • The business owner must either be the owner of the premises or must have a valid tenant agreement with the owner with a residual period of minimum 3 years.
  • The business owner must be a Current Account holder at any bank for at least 2 years.
  • The minimum average monthly account balance must exceed Rs. 1 lakh in the last 12 months.

It is crucial for the borrower to fulfil all of the above-mentioned criteria to qualify for this coveted loan, failing which their application may be turned down.

HDFC Bank Business Loan Eligibility

With HDFC Bank, a business owner can rely on availing loan ranging from Rs. 50,000 to Rs. 50 Lakh, depending on the income and repayment ability of the business. Loan application approval is subject to the following criteria –

       
  • The business owner must be a self-employed individual, a proprietor, or the co-owner of a Private Ltd. Co. or Partnership Firm, and must be involved in the business of Manufacturing, Trading or Services.
  • The business must have an annual turnover of a minimum of Rs. 40 lakhs.
  • The business owner must be a part of the current business for a minimum of 3 years, with a total experience of 5 years or more.
  • The business should be generating profit in the past 2 years.
  • The business must have a minimum annual income (as per ITR) of Rs. 1.5 lakhs per year.
  • The age of the applicant must be 21 years or more at the time of applying for the loan and should be 65 years or less at the time of loan maturity.

Tata Capital Business Loan Eligibility

One of the leading NBFCs in India, Tata Capital offers business loans ranging from Rs. 5 Lakh to Rs. 50 lakh for a maximum tenure of 3 years. In order to be eligible for this loan:

  • The business owner must be between 25 to 65 years in age.
  • The business must have been in existence for at least three consecutive financial years.
  • The business should be generating profit in the past 2 years.
  • The business turnover must exhibit an upward trend.
  • A registered Chartered Accountant must have audited the balance sheet.

Bajaj Finserv Business Loan Eligibility

Yet another NBFC that you can rely on for business finance needs is Bajaj Finserv. The lender offers Bajaj Finserv Business Loans up to Rs. 30 lakh, subject to following criteria:

  • The business owner must be between the age group of 25 to 55 years.
  • The business must have been in existence for at least three consecutive financial years.
  • The business should have ITR filed for at least the past financial year.

With Bajaj Finserv, self-employed professionals, self-employed non-professionals (business owners), as well as other business entities, can all avail the loan, if they belong to the following occupations –

  • Self Employed Professionals (SEP) such as Allopathic Doctors, Chartered Accountants, Company Secretaries as well as Architects.
  • Self Employed Non-Professionals (SENP) including Traders and Manufacturers, Retailers, Proprietors, and Service Providers amongst others.
  • Entities, comprising of Partnerships, Limited Liability Partnership, Private Limited, and closely held Limited companies.Other business types may also qualify, subject to their profile and lender’s discretion.

Kotak Mahindra Business Loan Eligibility

Kotak Mahindra offers Business Loans ranging from Rs.3 lakh up to Rs.75 lakh to its customers who are able to fulfil the following criteria:

  • The business must have been in existence for at least three consecutive financial years.
  • The business should be generating profit in the past 2 years.
  • If a self-employed individual is a borrower, they must have an annual turnover of Rs. 2 Crores.
  • For a manufacturer looking out for Kotak Mahindra Business Loan, the annual turnover must be Rs. 1 Crore.
  • Service Providers with an annual turnover of Rs. 50 Lakhs can also avail this loan.

These are some of the well reputed Business Loans available in India. Carefully compare all the eligibility requirements and choose the best match, before you avail a loan to boost the financial needs of your business.

       

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