By the end of 2019, the numbers of registered and unregistered SMEs were estimated to be at 42.50 million. Rightly called India's growth engine, SMEs in India employs around 106 million, that is, 40% of India's workforce (1).
However, to smoothly run this growth engine, funds are required. Most small businesses fail due to a lack of financial support.
A small business loan has, therefore, become a necessity these days. Loans for small businesses not only ensure its smooth functioning but also come handy in case you want to expand your small business after some time.
Loans for small businesses can be used for various purposes like meeting capital needs, purchasing equipment, and renovating infrastructure, among others.
We, therefore, bring this guide to you to help you know all about small business loans.
Types of Small Business Financing Loans
For start-ups, loans for small business is a popular option. The eligibility criteria for most small business loans may vary with different financial institutions.
Most lenders usually check your credit score, the profitability of your business, your annual turnover, and the age of your business. There are three types of business loans for entrepreneurs. They are:
- Equipment Financing
- Line of credit
- Angel investment
1. Equipment financing
This type of small business loan targets the equipment purchasing needs related to your business. This type of loan is self-secured as the equipment purchased by you serves as the security.
It is, therefore, possible that 100% financing of this type of loan can be secured. Securing this type of small business financing is hassle-free with easy eligibility criteria, which can be counted as the added advantage.
2. Line of credit
This is an agreement between the entrepreneur and the financial institution, wherein the financial institution assures the applicant that a certain loan amount will be lent to the applicant.
In this type of small business loan, the money can be lent in small parts or installments. Thus the interest has to be paid only on the installment and not on the complete loan amount.
This usually has flexible repayment tenures and longer duration. Line of credit is, therefore, a popular small business financing option among entrepreneurs.
3. Angel investment
Those looking for investment in different business ventures are called healthy investors. Along with providing funds, angel investors also offer to mentor young entrepreneurs.
When applying for a small business financing loan on Finserv MARKETS, the applicant must meet the following criteria:
- Age must be between 25-66 years
- Business vintage must be more than 3 years
- Income tax returns filed for minimum 1 year
- You must be an Indian citizen
- You are a self-employed individual
- Identity proof (Driving license, Aadhar, PAN, Voter’s ID)
- Residence proof (Utility bills)
- Business proof (registration certificate)
- 2 photographs (passport sized)
How to apply for a small business loan
You can initiate the process for a small business loan by following the steps given below:
- Submit your personal & business details in the online form for application of small business loan
- Select the amount you’d like to take as a loan
- Select the repayment tenure as per your convenience
- If all your eligibility criteria are met, your loan for small businesses can be approved within minutes!
You can get affordable interest rates if you apply for a loan for small businesses on Finserv MARKETS. Here, the interest rates start from 18%. Further, you may only be required to pay nominal charges.
All charges are levied upfront and in a completely transparent manner.
The Bajaj Finserv Business Loan also does not require any collateral to be signed against the loan. Further, you can get a loan up to ₹30 lakh credited to your account just within a day! With quick online processing of your application and approval within 3 minutes, you have the benefit of utilizing the money in case of any business emergencies.
Here, you can also enjoy a repayment tenure of 12-60 months selected as per your convenience. Moreover, you also get value-added services like customized insurance plans and comprehensive financial reports on Finserv MARKETS.
So why wait? Apply for a small business loan now take your enterprise to the next level!