A business loan is a loan specifically intended for business purposes. As with all loans, it involves the creation of a debt, which will be repaid with added interest. There are a number of different types of business loans, including bank loans, mezzanine financing, asset-based financing, invoice financing, microloans, business cash advances and cash flow loans.
Business income generates livelihood for entrepreneurs hence it’s nurturing, growth & expansion is of utmost priority. Short term business loan is required at many stages like for setting up new business or expansion in form of working capital or term loans.
Generally, Business loans are unsecured no collateral is required, but one must possess any commercial or residential property for being eligible for business loan.
How can a Business Loan benefit –
- Facilitate in expansion and scale-up plans
- Meeting up working capital needs and for asset purchase
- Increasing sales which leads to more profits
- Upgrading processes and advance technology to catch with market trends
- Branding and augmenting market presence
Basic eligibility for a Business Loan Different lenders have varying criteria for loan approval, but there are a few basic rules:
- The business shall be registered as a proprietary firm, partnership firm, LLP or a Company
- A credit score of 650+
- Working from atleast 24 months with growing cash flow
- Sound banking transactions
- Product potential & margins
A self-employed individuals / business owners in the age group of 23 to 65 years