Right from the moment you have a business idea, the need for the fund arises. Moreover, for the growing business, there is an inevitable need for the financial requirement to give the business a required boost. A business loan 2020 is the right financial instrument, where funds are utilized exclusively for business purposes.
Features of Business Loan 2020
A business loan can be acquired for all sizes of businesses whether it is for the micro, small, or medium-scale organizations. The loan amount can be used to meet all the short and long-term of business financial requirements. There can be many reasons due to which one requires a business loan. Some of the reasons are as follows:
This business loan can be availed to meet all types of business operations.Â
It is a hassle-free loan processing.
If you meet the eligibility criteria then you can get loan approval in a short time.
Online business loan processing saves you from making multiple bank visits.
An attractive rate of interest is offered with a business loan.
A high loan amount is offered based on an applicant’s profile.
Business loan processing is quick, simple, and easy to understand.
Online loan processing does not require any kind of paperwork for the loan sanctioning or financial assistance.
The business loan comes with a flexible loan repayment tenure which facilitates the borrowers to choose the best tenure as per their convenience.
Generic eligibility criteria for Business Loan 2020
Below are the generic eligibility criteria for availing the business loan:
The applicant has to be in business for the last 3 years with a minimum turnover of Rs.40 Lakhs
The business must have generated profit for a minimum of 1 year
The generic documents required for Business Loan:
PAN Card – For Company/Firm/Individual
Identity proof (any of the below):
Aadhaar Card
Passport
Voter's ID Card
PAN Card
Driving License
Address proof (any of the below):
Aadhaar Card
Passport
Voter's ID Card
Driving License
Last 6 months Bank statement
Business continuation proof (ITR/Trade license/Establishment/Sales Tax Certificate)
To help the business owners who require financial assistance the government has also introduced business loans primarily to provide funding to Micro, Small, and Medium Enterprises (MSMEs). There is a wide variety of these loan schemes and the modern entrepreneurs can decide which one suits them the best through various online portals. Let’s discuss the types, features, and eligibility criteria of business loans offered by the Indian government.
Types of Government Loan Schemes
Working Capital Loan
Working capital is the type of capital that businesses requires to conduct and manage their day-to-day activities and is classified into two categories such as secured and unsecured.
Corporate Term Loan
Corporate term loans are availed for business expansion purposes. The money involved in these types of termed loans usually is large and is expected to be repaid over a longer period.
Term Loan
As the name suggests, a term loan is a monetary instrument that is required to be repaid within defined tenure by the lender. It is a type of funding provided by banks and NBFCs to individual entrepreneurs, business owners, MSMEs, or large enterprises to make them meet their business requirements or working capital needs.
Government Loan Schemes
There are more than 10 popular business startup loan schemes that the government provides to the budding entrepreneurs. The features and benefits are given below:
Features
The government start up loans has been categorized into three types namely, Shishu, Kishor, and Tarun
No Collateral or Security Required
Processing Charges: Nil
No Minimum loan amount criteria
Maximum loan amounts up to Rs. 10 lakhs
Repayment Tenure up to 5 years
All Non-farm enterprises
The availed loan amount can be used for Term Loans and Overdraft facilities
To provide a business loan in a short period on Nov 5, 2018, our Prime Minister, unveiled a dedicated web portal named as psbloansin59minutes.com to enable the maximum loan amount up to Rs. 5 crores in just 59 minutes. Some of the great features of this facility are:
Quick access to the funds:Â Generally, such loan processing takes about 7 to 10 working days to complete. However, this loan scheme approval process takes just 1 hour.
Rate of interest: The generic rate of interest offered under this scheme is 8.5% onwards
Quick disbursement of loan amount: After the loan approval in 1 hour, you can expect the money to reach in your bank account in 7 to 8 working days
Collateral-free:Â It is an unsecured business loan.
The documents that the scheme bodies ask to provide them with is all the information they need to evaluate if the applicant is deserving the schemes. The factors of eligibility criteria involve the following:
Age of the applicant
Loan amount
Type of Business
Credit Score
Annual Turnover
Capital Invested
Documents Required to avail Government Loan Schemes
Passport-sized photographs
Business plan
Identity, Age, Address, and Income Proofs
GST Identification number
Proof of last 3 to 5 years paid income tax
Bank statements of the last 6 months
Business address proof
ITR returns for the last 2 years
To conclude, regardless of whether you take PSB Business loans or from any other bank, wisely planning a business loan is key for a successful and affordable loan.