The moment one has a business idea, the need for the fund emerges. The right financial instrument is a business loan without collateral, where funds are used solely for business purposes. Business can be represented as a tree which, instead of water, needs investment. It is very important in all respects to have a business loan without collateral from the right lender.
Whether you are searching for a loan for a start-up or looking for banks or PSB loans in 59 minutes, this article will help you out, so keep reading.
Features of Business Loan
Regardless of the size of the organization, a business loan may be used for all business sizes. To satisfy both the short and long-term business financial needs, the loan amount may be used. There are numerous lenders providing business loans without collateral protection.
- To meet the funds’ requirement for any business activities, a business loan may be used.
- The business loan processing is simple and easy
- A pocket-friendly interest rate is charged on a business loan
- The lenders provide a flexible tenure for repayment of loans that allows borrowers to select the best tenure according to their convenience.
Government Loan Schemes
Here are the features and advantages of government loan schemes:
- No security or collateral needed
- Processing fees: null
- No minimum loan amount criteria
- A maximum loan amounts up to Rs. 10 lakhs can be availed
- The flexible repayment tenure for up to 5 years are offered
- All Non-farm companies
- The acquired loan amount can be used for term loans or overdraft facilities.
Types of Government loan schemes
- Working Capital Loan
Working capital is the type of capital that companies need for their day-to-day operations to be carried out and handled and is divided into two types, such as secured and unsecured.
- Corporate Term Loan
Generally, the funds involved in these kinds of business loans are substantial and are supposed to be repaid for a longer period.
- Term Loan
A term loan, as the name implies, is a monetary instrument that must be repaid within a given tenure defined by the lender.
Features and benefits of the PSB loans in 59 minutes:
- Quick access to the funds: This loan scheme approval process takes just 1 hour.
- Rate of interest: The generic rate of interest offered under this scheme is 8.5% onwards
- Quick disbursement of the loan amount: After the loan approval in 1 hour, you can expect the money to reach your bank account in 7 to 8 working days
The documents that the scheme bodies ask to provide them with are all the information they need to evaluate if the applicant is deserving of the schemes.
- Age of the applicant
- Loan amount
- Type of Business
- Credit Score
- Annual Turnover
- Capital Invested
Documents Required to avail Government Loan Schemes
- Passport-sized photographs
- Business plan
- Identity, Age, Address, and Income Proofs
- GST Identification number
- Proof of last 3 to 5 years paid income tax
- Last 6 months bank statements
- Last 2 years for ITR returns
Common eligibility criteria for a Business Loan
- An applicant should be in business for the last 3 years with a minimum turnover of Rs.40 Lakhs
- A business must have generated profit for a minimum of 1 year
A Common list of documents required for a Business Loan:
- PAN Card – For Company/Firm/Individual
- Identity proof (any of the below):
- Aadhaar Card
- Passport
- Voter’s ID Card
- PAN Card
- Driving License
- Address proof (any of the below):
- Aadhaar Card
- Passport
- Voter’s ID Card
- Driving License
- Last 6 months Bank statement
Following are some preferred business loans 2020:
SBI Business Loan
- A minimum loan amount of Rs. 10 Lakhs and maximum of Rs. 20 Crores are offered by SBI.
- A flexible repayment terms from 5 years up to 15 years.
- Processing Fee of 1% of the loan amount, with the maximum up to Rs. 10 Lakh.
- The low rate of interest rate is offered varies from 9.05% to 16.30% (differ based on applicant’s profile).
HDFC Business Loan
You can also get to use the free online business EMI calculator from which you can know the EMI to pay for your Business Loan. Based on the applicant’s eligibility you can get a business loan up to Rs 50 lakhs which proves that the HDFC Business Loan is among the best and ideal loans for you and your business.
- Interest Rate: 15.65% to 21.20% per annum
- Processing Fees: Up to 2.50% + GST as applicable
- Minimum Loan Amount: Rs 50,000
- Maximum Loan Amount: Rs 50 Lakhs
- Minimum Tenure Period: 1 year
- Maximum Tenure Period: 4 years
RBL Bank Business Loan
This loan is among the popular and perfect solutions when it comes to serving yourself for short-term finance and working capital requirements.
- Minimum Loan Amount- Rs 10 Lakh
- Maximum Loan Amount- 35 Lakh
- It is an unsecured loan
- Loan tenure option of 12 to 36 months
- Interest Rate- 16.25%
ICICI Bank Business Loan
ICICI Bank ranks as one of the top business loan providers in India. It comes at attractive interest rates, offers, and flexible tenure making it more beneficial to borrowers. The minimum interest rate and processing fee are some of the best features of the ICICI Bank Business Loan.
- Interest Rate: 16.49%
- Processing Fee & Charges: Up to 2% + GST as applicable
- Minimum Loan Amount: Rs 1 Lakh
- Maximum Loan Amount: Rs 40 Lakh
- Minimum Tenure Period: 1 year
- Maximum Tenure Period: 5 years
Axis Bank Business Loan
Axis bank provides business loans at lucrative interest rates. The bank has various schemes depends on the eligibility of the borrower which helps to develop existing businesses as well as a start-up.
- Interest Rate: 16% onwards
- Processing Fees & Charges: Up to 1.25% + GST
- Minimum Loan Amount: Rs 50,000
- Maximum Loan Amount: Rs 50 lakhs
- Minimum Tenure Period: 1 year
- Maximum Tenure Period: 3 years
Factors that have a major impact on Business Loan Interest Rates
The offered business loan interest rate depends on the lender and the various factors for your loan application. Some of the factors that affect the interest rate are:
- Poor credit history: This can lead to a higher rate of interest on a business loan to make up for the extra risk that you won’t pay them back.
- Weak or limited business history: If you have low profit margins, lenders could charge you comparatively high rate of interest on a business loan.
Ways to get Low Interest on a Business Loan
An interest rate plays a crucial role in the total business loan amount so it is necessary to get a low-interest rate deal. Following are a few ways of getting a low-interest rate on a business loan:
- Put up collateral: If you can’t pay off the debt, the lender could claim the collateral for repayment.
- Do in-depth- Research: Lookout for the options that suit or fit you’re your requirements and vice and versa.
- Increase profitability: Try to increase business profitability before applying for a loan. However, this might be easier said than done but this can help you in increasing the chances of receiving a lower interest rate on a business loan.
Conclusion
Regardless of whether you acquire psb loans in 59 minutes or from some private lender, it is always advisable to do thorough research and clearly understand the lender’s discretion before applying for a business loan.
