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Fincash » Business Loan » How to Apply for Business Loan

How to Apply for Business Loan?

Updated on February 21, 2024 , 8893 views

Whether you wish to launch a new business or expand the existing one, a business loan scheme from a reliable service provider can help you significantly down the lane. When you need to select and apply for the desired business loan to finance your business, there are several factors that you need to consider for the same. Right from comparing the interest rates for Business loans by different providers to visiting the official websites of loan providers, asking acquaintances about the given scheme, and so more –you should look into each & every aspect before online business loan apply.

how to apply for business loan

It is important for enterprises –especially the small-scale businesses, startups, and MSMEs, to select the right business loan as it would help them in drawing out the majority of benefits of the loan.

Common Considerations for MSME Loan Application

1. Type of Business Loan

You can look out for two types of business loans out there:

Secured Loans

The given loans are provided in lieu of Collateral from the respective borrower. Therefore, even when the business is not able to pay back the loan amount, the lender can look forward to recovering money by auctioning or selling the asset that was taken as collateral. This is recommended for long-term businesses that have been into the given Industry for quite long.

Unsecured Loans

These happen to be business loans without the involvement of any collateral or security. In this case, the overall risk is borne by the respective lender. Unsecured loans tend to have a higher rate of interest in comparison to the secured loans. Unsecured loans are regarded as best-suited for small business organizations that would not prefer risking the respective assets. To top it all, with a reputable financial report and Credit Score, businesses can look forward to getting access to unsecured loans for a lower rate of interest.

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2. Loan Requirement

Before you go applying for the loan, you should analyze the overall requirements of your business for the loan. Here are some points to consider:

  • If you would apply for the loan in excess of your actual requirements, it could lead to wastefulness. Moreover, the higher amount of loan you would apply for, the higher would be the EMI & repayment amount.

  • On the other hand, if you would go for applying the loan that turns out to be below the specific financial requirements of your business, then your overall need for investment will not be met. Moreover, you will be required to apply for some other loan at a higher rate of interest.

3. Basic Criteria

Before you go ahead with applying for the business loan, it is important to check whether or not you are fulfilling the basic criteria for the same. Check into the important factors like the overall credit score and others.

Applying for the Business Loan Online

  • You can apply for the business loan online by filling out the necessary fields as specific in the online form of the loan provider.
  • Once you have received the loan eligibility, you can look forward to furnishing the necessary documents and submitting the same.
  • The loan provider would then verify your business loan application along with the submitted documents. This might even involve some personal discussion with you.
  • Once the approval has been given, the loan gets sanctioned.
  • You can receive the desired business loan in the respective Bank account.

Top Banks in India Offering Business Loans

When you are searching for the right loan provider as per your business requirements, you can come across a myriad of options in India.

Some of the leading options are:

Bank (Loan Application Company) Interest Rates for Business Loans Processing Fee
SBI Business Loan 11.20 percent onwards 2 percent to 3 percent
HDBC Bank Business Loan 15.65 percent onwards From 0.99 percent to 2.50 percent
ICICI Bank Business Loan 16.49 percent onwards From 0.99 percent to 2 percent
Bajaj Finserv 18.00 percent onwards Up to 2 percent of the total loan amount
IDFC First Bank 22 percent onwards Around 2 percent

A business enterprise is known to take up a loan for fulfilling its business objectives and Investing in the overall growth. Therefore, the selection of the right financial institution for lending the loan amount and applying for the same after going through all the terms & conditions are important factors. Make the most of the lucrative loan offers as provided by the leading banks or financial institutions out there.

Steps to Apply for Business Loan

  • Go to the official website of the loan provider
  • Search for the loan application form
  • Fill in the necessary details
  • Upload the necessary documents
  • Submit the application form

Eligibility

  • The application should have an operational business for at least 3 years
  • The business should have generated profit for at least one year
  • The applicant should be the sole owner, proprietor, or partner in the business
  • The application should be aged between 21 & 65 years
Disclaimer:
All efforts have been made to ensure the information provided here is accurate. However, no guarantees are made regarding correctness of data. Please verify with scheme information document before making any investment.
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