Small Business Loan 2022

Business loans may be used for a number of purposes, including expanding a business, managing cash flow, buying equipment/machinery, hiring/training workers, purchasing raw materials, updating inventory, and more. MSMEs and startups may also apply for small business loans. There is no minimum loan cap, and customers can get collateral-free business loans up to Rs. 1 crore with flexible and personalized repayment options.

If you take a loan for a new company from a bank or lender, you will be given a lump sum amount that you must repay over a specified period of time in the form of EMIs, at a fixed or floating interest rate. There is no minimum loan amount requirement, and the maximum loan amount go up to Rs. 1 crore, depending on business needs. The repayment period varies between 1 year and 5 years. In certain cases, the maturity duration can be prolonged at the lender’s absolute discretion.

• Interest rate starts at 11.90 percent and go up from there.
• Nature of the loan: Short- and long-term loans, working capital loans, secured and unsecured loans
• Borrowing Caps: There are no borrowing limits.
• Maximum Loan Amount: Up to Rs. 1 crore (collateral-free loans), with the potential to go higher depending on business needs.
• Duration of repayment: 12 months to 60 months

The fees and charges associated with a business loan differ from one lender to the next and case to case. The fees and charges are determined by the amount of the loan, the interest rate, and the duration of the repayment period.

The following formula is used to measure the EMI for a business loan:

E = P x r x (1 + r) n / [(1 + r) n - 1]

• E stands for Equated Monthly Instalment in the illustration above (EMI)
• The Principal (or Loan) number is denoted by the letter P.
• The interest rate (calculated monthly) is r, and 
• the tenor is n. (calculated monthly)

The bank will deposit the appropriate loan amount into your bank account after your loan application or loan is accepted. The time it takes for a loan to be approved and disbursed varies by lender.

The interest rate on a business loan starts at 11.90 percent and varies depending on the applicant's qualifications:

The following are the conditions for securing a business loan:

• Criteria for Age: At the time of loan application, you must be at least 18 years old, and you must be 65 years old when the loan matures.
• A resident of India who has never been convicted of a crime
• Fees & Charges, Revenue, Business Turnover, Operating Background, Business Vintage, Credit Score, and Profitability Requirements will be calculated by the financial institution in question.

The following organizations are liable for a business loan:

• People are individuals.
• Entrepreneurial Ventures
• SMALL Companies
• Retailers, distributors, and traders are all examples of artisans, retailers, and manufacturers.
• Limited Liability Companies (LLCs) both private and public
• Limited Liability Companies (LLCs)
• Firms that are sole proprietorships, companies, limited liability partnerships, and large corporations that are solely involved in manufacturing, trade, or services.
• Non-Governmental Organisations, Cooperative Societies, and Trusts
• CAs, Doctors, Engineers, Business Secretaries, Allopathic Doctors, Designers, and other self-employed individuals/professionals

• The minimum age is 18 years old and the maximum age is 65 years old.
• An Indian citizen who has never been convicted of a crime
• An applicant who has never defaulted on a bank loan.

Salaried applicants must submit the following documents with their loan application, along with the applicant's and co-or applicant's partners' KYC documents:

• Minimum monthly salary: As determined by the bank
• Salary slips from the previous six months 
• Previous year ITR 
• Office ID card 
• Present employer's appointment and bid letter

• Criteria: Minimum age is 21 and maximum age is 65. 
• For at least a year, the company has been in operation. 
• Minimum Annual Turnover: It is dependent on the lender. 
• An Indian citizen who has never been convicted of a crime 
• Applicant who has never defaulted on a bank loan. 

A salary at the time of loan application, must have the following documents, as well as the applicant's and co-or applicant's partners' KYC documents:

• Bank statement from the previous 12 months
• ITRs, GST returns, and sales tax statements from the previous year
• Last one-year P&L statement – CA will inspect all records.
• Registrations, licenses, and permissions copies

• Criteria for age range: 18 years to 65 years old.
• Nature of Business: This is a one-of-a-kind company that only does business in the service, trading, and manufacturing sectors.
• Business Plan: A detailed and self-written business plan 
• Minimum Annual Turnover: varies by lender. 
• Business vintage: Minimum 2 years 
• Financial History: A Prosperous and Secure 
• Past Sources of Income: There are several different ways to make money. 
• CIBIL Score:  700 and upon 
• Loan defaults: If any, there have been no past loan defaults. 
• Ownership: The applicant must own a home, office, or shop.

• Passport sized Photographs- should be taken recently 
• Address Proof - Voter's ID card, Aadhar Card, Passport, Driving license, Utility bill, Water Bill, Electricity Bill
• Identity Proof - PAN card, Aadhaar card, Valid passport, Voter's ID card, Driving License 
• Proof of Business Address 
• Proof of company existence- last six months' bank statement 
• Income Tax Returns (ITRs) from the previous three years, as well as
• Balance sheet and profit & loss statement
• Account Certified, CA audited, attested, and signed financial statements 
• A copy of the business license Certificate 
• Sales Tax GST Registration Certificate 
• Certified Copy of Partnership Deed 
• Proof of ownership of property used for commercial purposes