Business loan and how it works
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What is a Business loan? And how it works
A business loan is an unsecured type of credit designed to cover various expenditures during a business. Borrowers needn’t mortgage any asset to avail funds. It takes money to make money. That creates access to working capital necessary — whether you’re just incorporated or have big plans to grow your existing business. In fact, almost every business requires an additional working capital from time to time to make changes in the business. When this scenario arises, Business Loans could be the simplest option.
Types of Business loan available:
Short Term Loans: A loan that is scheduled to be paid in a maximum of one year. When your business isn’t entitled to a line of credit from financial lenders, you would possibly still have success in getting money from then in the form of a short-term loan (less than a year) to finance your short period capital needs.
Long Term Loans: Business Term Loans are the definitive commercial loan, commonly used for major investments within the business or in an asset addition. These loans often have fixed interest rates, alongside monthly or quarterly installments schedules and a set maturity date.
Startup Business Loans: If you’ve got an excellent new business idea for the first time, and you deficit in the capital then this loan will help.
Credit Line Or Line Of Credit: Business lines of credit are actually unsecured debt, you don’t need to provide collateral or assets, which the lender can sell to claim in case of default. This idea is similar to a business credit card, but getting an advance cash amount from a credit card is usually pricier.
How to qualify for a business loan?
An applicant can qualify for a commercial loan by meeting the subsequent criteria:
- Minimum 3 years of business vintage
- Applicant’s age should be between 25 to 55 years
- IT returns filed for a minimum of the previous year
- A healthy CIBIL score and powerful credit profile
How to apply for a business loan?
The process to apply for a business loan is quite easy.
- Fill up the web form of business loan to apply.
- Submit all the relevant documents to finish the process.
- Get money in bank within 24 hours.
Documents required for Business Loans :
- ADDRESS PROOF
- LAST 2 YEARS BALANCE SHEET
- COMPANY REGISTRATION DETAILS
- LAST 2 YEARS PROFIT & LOSS STATEMENT