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BUSINESS LOAN
What is Business loan.
• A Business loan is a loan which is provided at low rate of interest in which monthly
payments are fixed over the tenor. It is specifically intended for growing business
purpose. Or we can say

• A Business loan is a loan specifically intended for business purpose need. It is obligated
to repay according to the terms and conditions.
• Business loans may be either secured or unsecured. With a secured loan, the borrower
pledges an asset (such as plant, stocks, equipment, or vehicles) against the debt. If the
debt is not paid back, the lender may claim the secured asset. Whereas Unsecured loans
do not have collateral, though the lender will have a general claim on the borrower’s
assets if repayment is not made.
PURPOSE FOR TAKING BUSINESS LOAN

• Small business organizations sometimes need money to meet their daily

operational needs until their earning assets are capable enough to cover their
working capital needs. As the business starts growing and their own assets
will enable them to earn money, they can repay the working capital loan to
the bank.
VARIOUS OTHER PURPOSES FOR TAKING
BUSINESS LOAN
• For expansion of business-Organizations need loan for expanding their businesses. Loans
can help them covering the expenses of expanding business without eating their operational
funds, so that they can continue to impress customers while growing their business.
• Inventory-One of the largest and most difficult thing is to manage expenses in many
industries is inventory. Once the organization starts operating, it needs continually expansion
and replenish inventory to keep up with demand and to provide better options to the
customers. So by taking a loan to offset inventory costs, the organizations can stay ahead of
trends and customer demand without hurting their cash flow.
• Cash Flow-Cash flow is always a big challenge especially for small business organizations. A
short-term loan can help these businesses stay afloat when profits are low.
• Equipment-Equipments are expensive. So loans can help in managing the costs of
equipments.
ELIGIBILITY FOR TAKING BUSINESS LOAN
• There are Some factors which decides Business Loan Eligibility. Some of they are
as follows:-
• The minimum age of the applicant should not be less than 24 years. Whereas the
maximum age of the applicant should not be more than 65 years.
• The business should be profit making organization for the last one year.
• The current business should be running for at least 48 months(4 Years) old.
• The applicant should have at least 60 months(5 years) of business running
experience.
DOCUMENT REQUIRED FOR TAKING BUSINESS LOAN

• Filled application form.

• Valid identity proof (passport/ voter’s ID/ driving license/ PAN card/ Aadhar card).
• Valid address proof (latest utility bill/ ration card/passport).
• Financial documents: Income tax return along with profit & loss a/c. & balance sheet
of last 2 years, last 6 months updated bank statement & business proof.
• Along with this Current year performance and projected turnover on letterhead of
the entity is also required.