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How Do You Get a Business Loan in India? Instant Approved


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A business loan helps you to get significant financial assistance required for your business operation. Being a credit without any tag of end-usage restriction, you can leverage your borrowed capital for any purpose that suits your business needs, Business Loan in India,yono business,ajio business,sbi mudra loan,e mudra loan


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The online application process makes the credit facility much more straightforward and faster. Whatsoever, you must know how you can correctly apply for this credit to reduce chances of rejection.


Steps for Getting Business Loan in India

Following are some steps that you should follow to meet your financial requirement for running the business operations:

Step 1: Find Suitable Lending Institutions

There are several lending institutions in India from which you can get a business loan. However, you should shortlist lenders among all those considering the interest rate, applicable processing and other charges, penalties, etc. This will help you avoid lenders that can substantially increase your cost of borrowing.

Step 2: Check the Eligibility Requirement

After shortlisting lenders, you need to check their eligibility parameters. Before requesting credit from a particular lender, you need to ensure that you meet all the basic eligibility standards. Else, you may need to encounter an unnecessary rejection of your credit request. 

Step 3: Apply for the Business Loan

You will have to visit your chosen financial institution’s official portal and find the business loan application form. Fill it in carefully by entering the required personal, residential and business details. Mention the loan amount and preferred tenure as asked in the application form. After all these, you will have to submit this duly-filled application form. 

At this stage, your lending institutions will perform initial verification of your credit request and contact you for the next processes, including documentation. 

Step 4: Complete the Documentation Process

You need to provide photocopies of all the required personal, income, residential, and business proof. The lender carefully undergoes all these records for verification purposes.


Step 5: Sign on the Loan Sanction Letter

Upon verification, the lender approves the credit requests. They also issue and send a loan sanction letter. You need to sign this and send a copy back to your lender. This sanction letter contains various information about the credit, including the total loan amount, applicable interest rate, tenure, charges, repayment schedule, etc. You need to carefully read all these before putting your signature on the paper.

Upon completing all these steps, the lender will process your loan and send you the requested credit amount at the earliest.

Eligibility Criteria for a Business Loan in India

Here are some basic eligibility parameters you need to meet to qualify for the business loan:

  • You need to be a self-employed professional (doctor, lawyer, etc.) or non-professional (manufacturers, traders, etc.)
  • Your age must be between 25 and 6 years
  • The minimum business vintage required for the business loan is 3 years
  • Your minimum annual income should be Rs. 1.5 Lakhs

Note: These eligibility parameters are subject to vary across lending institutions

Although a high CIBIL score is not a mandatory eligibility parameter, a poor credit score below 685 can lead to the rejection of your credit request. So, before you apply for a business loan, you need to ensure that you have a decent credit score. You can check credit scores online free of cost from the website of some major financial institutions or by directly logging into the website of credit bureaus. 

Documents Required During Business Loan Application Process

Following are some documents you need to provide while applying for the business loan:

  • Identity Proof: PAN card, voter ID card, passport, etc.
  • Address Proof: PAN card, Aadhaar card, electricity bill, agreement of lease
  • Income Proof: ITR statement
  • Bank account statement for at least the last 6 months
  • Declaration of a sole proprietorship or partnership deed
  • Profit and loss statement and balance sheet of your business for the past 2 years

Your financial institution may also ask for additional documents if necessary.

You should also be aware of the common mistakes that individuals usually commit while applying for a business loan.

Common Mistakes to Avoid While Applying for a Business Loan

Here are some of the common mistakes that you need to avoid:

  • Not Reading the Loan Terms

You need to go through the terms of your loan, including the interest rate, charges, repayment tenure, EMI, type of interest rate (fixed/floating), etc., properly. Else, you may face difficulty in repayment, or the borrowing cost may increase. 

  • Lack of a Business Plan

The lending institution may ask you to give a brief about how your business will generate revenues. If it is not convinced, it may not give you the loan or agree to lend only a lower and ultimately insufficient amount.

  • Unawareness of the Eligibility Parameters

By checking the eligibility parameters, you can surmise whether you will get the loan from a particular lender. If not, you can request credit from another financial institution.

The online application process for applying for a business loan is quite simple. You just need to access the concerned application form and enter details as asked. This process lets you avoid the time and effort of reaching the physical branches of your lender, Business Loan in India,yono business,ajio business,sbi mudra loan,e mudra loan, Business Loan in India,yono business,ajio business,sbi mudra loan,e mudra loan, Business Loan in India,yono business,ajio business,sbi mudra loan,e mudra loan, Business Loan in India,yono business,ajio business,sbi mudra loan,e mudra loan


Which bank is best for business loan?

HDFC Bank Business Growth Loans. HDFC bank offers loans for everyone whether it is self-employed individuals, proprietors, partnership firms or companies that are involved in the business of trading, manufacturing or services.

How can I get business loan easily?

1-Your business should have a vintage of at least 3 years.
2-Your business should have its previous 2 years turnover, duly audited by a CA.
3-You should have a CIBIL score of 685 and more.

Who all are eligible for business loan?

The following people are eligible to apply for a Business Loan: Self employed individuals, Proprietors, Private Ltd. Co. and Partnership Firms involved in the business of Manufacturing, Trading or Services

Is Mudra loan available now?

MUDRA loan is available through Banks/NBFCs/MFIs for such activities. All kind of manufacturing, trading and service sector activities can get MUDRA loan

How much business loan can I take?

How much of a business loan you can get depends on your business’s annual gross sales, creditworthiness, current debts, the type of financing, and the chosen lender. In general, lenders will only provide loans up to 10% to 30% of your annual revenue to ensure you have the means for repayment.

Sanjeet Kumar is a graduate of Journalism, Psychology, and English. Passionate about communication - with words spoken and unspoken, written and unwritten - he looks forward to learning and growing at every opportunity. Pursuing a Post-graduate Diploma in Translation Studies, he aims to do his part in saving the 'lost…

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