Business Loan for Entrepreneurs in India

In many cases, a firm’s profit needs a boost. When a firm finds financial aid at the right time, it may reach its full potential. Such aid is often needed, mainly when your firm is in its early stages or expanding.

A business loan for Entrepreneurs is a great source of finance to help your business financially. Young entrepreneurs with unique ideas but little money might benefit from business loans.

Entrepreneurs may apply for a business loan to cover their financial needs and then repay the lender. Let us now link you to this topic in more depth in the next part.

Perks of Business Loans for Entrepreneurs

Business loans for entrepreneurs are used to describe loans required for expansion. Sometimes you might confuse yourself with the entrepreneur loan, but these are not the same. Here are the perks of business loans for entrepreneurs:

• Prompt payment

When people request a business loan, banks realise they need the cash as quickly as feasible. As a result, banks provide quick firm financing. A small firm loan may be issued within three days. Your firm can expand without being hampered by a lack of cash.

• Minimum paperwork required

To complete loan forms, banks demand a minimum amount of papers. You won’t have to complete a lot of paperwork to secure a loan from us. Firm financing papers may be submitted online or offline. This, however, depends on your lender.

• Competitive rates 

Your business loan rates remain low since financial firms are devoted to aiding small businesses in India. You may seek help with money without having to make hefty payments.

Eligibility Criteria of a Business Loan For Entrepreneurs

• Self-employed persons, proprietors, private limited firms, and partnership firms engaged in manufacturing, trading, or providing services.
• Annual business revenue of at least Rs. 40 lakhs.
• People who have worked for the present firm for at least three years and have five years of firm experience.
• Those whose firm has been profitable over the last two years. 
• The firm’s minimum annual income should be Rs. 1.5 lakhs per year.
• The applicant must be at least 21 years old when applying for the loan and no older than 65 years old when the loan matures.

Papers Needed to Apply For a Business Loan:

• Firm or people PAN CardA photocopy of any of the following papers as evidence of identity
• Aadhaar Card
• Passport
• Voter ID card
• PAN Card
• Driver’s LicenseA photocopy of any of the following papers as evidence of address:
• Aadhaar Card
• Passport
• Voter ID card
• Driver’s License
• Bank statements from the last six months

• After CA Certified/Audited, provide the most recent ITR, income, balance sheet, and profit and loss account computations for the past two years.
• ITR or Trade license or Sales Tax Certificate as proof of continuation is required.
• Other required papers include the Sole Proprietorship Declaration and more.

How to Obtain a Business Loan as an Entrepreneur?

This section will walk you through the steps of obtaining a business loan:

• Define your loan needs

The first and most vital stage is thoroughly defining your firm’s financing needs. It is essential to specify your needs since the bank or lender will base their judgement on whether you need a loan. By clarifying the need, you may guarantee that you are not overstating your requirements.

• Make a thorough business plan

Following the identification of the necessity, the second vital aspect in obtaining a firm loan is developing a firm plan. By reviewing your business plan, lenders may better understand how you intend to spend and distribute the funds. It will also provide a rough idea of how you aim to build your firm.

The lender will surely want to know it to guarantee that you can make the repayments on time since failing to do so would result in a loss for the lender. Make sure your strategy is concise yet thorough. You may include the following items in your plan:

• The reason for your firm’s existence.
• Use relevant data from your field.
• Your firm’s previous success.
• Future objectives for the firm.

• Prepare Papers

When your firm plan is established, the following step is to prepare the papers. Paperwork is one of the most challenging parts of qualifying for a business loan since it entails many complex tax filings, money deals, and other legal processes.

Another reason is that the process takes longer to complete since more money is involved, necessitating more papers. Other papers may be required depending on the lender. Yet, the following is a broad list of the papers required:

• PAN Card
• Income tax returns & GST returns
• Partnership Deed or Certificate of Incorporation
• Your firm account’s bank proof
• Money proof from the previous three years, including audited balance sheets, audit reports,  profit and loss proofs, etc.
• Money projections for the future 
• Contact the lender

Visiting lenders/banks is the penultimate stage in the business loan form process. You can also choose an online business loan to make getting financing easier. To guarantee the best deals, compare the costs and perks of numerous lenders before making contact. Bank loans, for example, may have lower rates but need a longer time to repay. On the other hand, small cooperative banks provide greater lending rates while requiring fewer papers and proofs.

Another important question to ask is about the security that lenders need. Finally, if you require a business loan from a lender, you should determine what extra fees and processing expenses are involved. 

Conclusion

Acquiring capital is vital for a firm’s growth and progress. Business loans are useful when a firm wants to borrow funds or expand its operations. They may also aid in preserving cash flow during tough times. Business loans help you stay financially secure in a volatile market. 

Consider all the perks and drawbacks of contacting each lender before deciding on which is best for you. If you want more information about personal loans, check out similar blogs on Piramal Finance and explore their products and services.