Are you looking to expand your business and increase your revenue? You can apply for a small business loan, also known as a commercial loan which is designed especially for investment in a business. They cater to the urgent needs of businesses to help them grow. Based on the loan amount you require, and your relationship with the lender, they are either secured or unsecured.
In this article let us learn more about a small business loan that will be helpful for you when applying. We shall also see how you can apply for small business loans. It is a simple 4 step process.
- Know why choose a small business loan?
While there are various other loan options available, a small business loan is the best option for you because:
- It offers faster approval of the loan.
- No or fewer documents required for getting the loan.
- If you are opting for a lesser amount of small business loan, then no collateral is required for the loan.
We hope these benefits will convince you to apply for the loan. For applying it is important to fulfill the eligibility criteria for the small business loan which are mentioned below.
- Check the Small Business Loan Eligibility Criteria
The business loan eligibility criteria for various lenders vary, but some common pointers valid for all are:
- The applicant must be a self-employed manufacturer, trader, retailer, or professional.
- The applicant must be over 21-year of age and at the time of maturity must not be more than 65 years of age.
- The minimum turnover of the borrower should be Rs 10,00,000 in the last 12 months.
- In the past year, the applicant must have an ITR of more than 2.5 lakhs.
- The borrower must have the business running for 3 years and have a total of 5 years of experience in running a business.
- The credit score of the applicant must be over 650.
- Fill the application form
If you are convinced and want to apply for a small business loan then now you will be filling the application form and uploading some necessary documents. For that follow the below-mentioned steps.
You can either use the lender’s website for filling the application form or download the app from the play store or Apple store. On both, you will see the pre-uploaded form which you will be required to fill. The application form requires the borrower to fill in the following information:
- Personal Details like Name, age, address, gender, etc.
- Professional Details: Employer, work experience, income, etc.
- Banking Details: The Account number, Bank name, etc.
- Loan terms: The loan amount you require
Once you have filled in all the information, for verification you will be required to upload some documents like
- Recent photograph
- Valid Identity Proof such as PAN card, Driving License
- Valid Address Proof such as Electricity bill, Passport
- Bank statements
- GST or ITR
- Income proofs
- Proof of Business existence (like Certificate of Incorporation, etc.)
After filling in all the information, you can now submit your application and wait for approval from the bank.
- Approval and Disbursal
After careful examination of your application form and other details, you will be provided with the loan amount, interest rate, and the tenure that the lender is ready to offer you. If you approve the same, your loan application will be approved and the amount will be disbursed into your account in the next 30 mins.
The entire loan application process for a small business loan is quick and is complete in 24 hrs. If you too require an amount for your business, you can plan the amount you require for your business and then apply for the same.