Apply for Business Loan: Documents You Need for Business Loan

What is a Business Loan?

The business loan meaning is a loan that is offered to entrepreneurs who are running a company and need external financial resources for operations. Businesses can cover expenses such as employee salaries, rent, buying pieces of equipment, or expanding the business with the help of business loans. The credit score and business turnover indicate the creditworthiness of the business owner. The business loan can only be used to cover business expenses and not personal expenditures. Apply for a business loan here.

Business Loan Eligibility Criteria

Now, you must be wondering if you are eligible for a business loan or not. You should be aware of the business loan eligibility criteria before applying for a business loan. Here are some important points that make you eligible for a loan:

The first thing in the business loan eligibility parameter is that the minimum age of the borrower should be 18 years. It can also depend on the financial institutions.
Self-employed professionals and self-employed non-professionals, both can apply for business loan.
The business must be operating for more than six months from the time of application.
The minimum turnover of the business should be Rs. 90,000 in the last three months from the time of application.
The business location should not be in the blacklisted area or a negative area.
If you have a charitable organization, NGO, or trust then you are not eligible for a business loan.

Documents You Need for Business Loan

If you have checked your business loan eligibility and now you are planning to apply for business loan, you will need to prepare some documents for that. It mostly depends on the financial institutions but here are some common business loan documents you will need:

PAN Card, Aadhar Card, Passport, or any other identity proof.
Passport-sized photographs of the person who is applying for the business loan.
Address proof of the company.
Memorandum of Association (MOA) and Article of Association (AOA) of the company.
Proof of GST registration
Sales Tax Certificate
Financial documents attested by a Chartered Accountant
Profit and Loss account statements and balance sheets of the company are also
needed by the financial institutions.
Bank statement of the applicant and the company

How to Calculate Business Loan EMI?

A business loan EMI is the monthly payment of the business loan that you have taken from a financial institution or bank. Business loan EMI can be easily computed by a business loan EMI calculator. Here are some simple steps that can help you calculate your business loan EMI. Enter the loan details like the loan amount that you want to lend, the interest rate, and the loan tenure as your preference. The calculator will automatically compute your monthly business loan EMI.

Business Loan for Women Entrepreneurs

In recent years, many women ventured into entrepreneurship. Women are contributing to the global business landscape by creating innovative businesses and driving economic growth. To foster businesswomen, many financial institutions and government agencies have introduced specialized programs for them.

Some government business loan schemes for women entrepreneurs are Cent Kalyani from the Central Bank of India, Mudra Loan under PMMY, ICICI Bank-self help group- Bank Linkage Programme (SBLP), Stand-up India, PNB Mahila Udyami, and many more. Women can take business loans to bring their business to new heights.

Conclusion

A business loan is essential for any business to grow and achieve success. Applying for a business loan can be a hassle, but when you know what is the business loan eligibility and business loan document you need in order to apply for business loan, then it is a cakewalk for you. There are many financial institutions that provide business loans at lower rates. Also, there are many business loan for women provided by government agencies to grow their business.

How To Calculate Your Business Loan EMI At Lower Rates?

What is a Business Loan EMI Calculator?

A business loan EMI calculator is a tool that is used to calculate EMI of the loan before applying for it. It requires few inputs to calculate the monthly business loan EMI like loan amount, interest rate, and repayment tenure. When you enter all the loan details, the loan EMI is automatically calculated. Business loan calculator can help you calculate your monthly EMI payment in a wink of an eye.

How To Use A Business Loan Interest Calculator?

Business loan EMI can be easily computed by a business loan EMI calculator. Here are some simple steps that will help you calculate your business loan EMI. Enter the loan details like loan amount that you want to lend, the interest rate, and the loan tenure as your preference.

The calculator will automatically calculate the EMI amount. You will need to pay the EMI amount every month along with the total interest and principal components. The repayment schedule displays the reduction of your loan over time.

You can choose the most suitable options for your business needs at lower rates. Readjust the loan amount, tenure, and interest rate until it falls under your budget and repayment capacity.

Factors Affecting Business Loan EMI

There are generally three factors that can affect your business loan EMI. They are:

Loan Amount: The loan amount is the amount you want to borrow. EMI is largely affected by the loan amount, as higher the loan amount, higher will be your monthly payment of EMI and lower the loan amount, lower the EMI.

Rate of Interest: Lower interest rates are not always on the positive side. Instead of looking for lower interest rates be aware of the hidden charges and terms and conditions before going for that loan.

Repayment Tenure: The longer the tenure the lesser the EMI whereas shorter tenure means high amount of EMI.

Importance of a Good Credit Score to Get a Business Loan Easily

A good credit score acts as an indicator of your ability to repay loans to lenders. You are most likely to get qualified for new loans if your credit score is high. Poor credit score may disqualify you from getting a loan with lowest interest rates. There are many advantages of possessing a good credit score. Credit score shows your creditworthiness that increases the lender’s confidence in your ability to repay the loan. You can also qualify for loans with lower interests if you have a good CIBIL score.

Tips to Negotiate a Lower Interest Rate on Loan

Here are some tips for you to negotiate a lower interest rate on your net loan:

A Good Credit Score- You can get a loan at lower interests by maintaining a healthy credit score. To attain CIBIL score of 750 or above, repay the EMIs and credit card bills on time.

Good Repayment History- Next time pay the credit card bill in one go instead of only paying the minimum due. When you have a good repayment history, it indicates your trustworthiness to the lenders.

Compare Interest Rates- There are various financial institutions that are offering loan services at lower interests. Run a research on loans and find the best suitable option that comes under your budget.

Take Benefit of the Credibility of Your Employer- Working in a reputed company can get you a ticket to getting favourable loan deals. When you have a steady job, lenders assume that you have a stable income and trust that you will repay the loan on time.

Conclusion:

Business loan EMI calculator plays a crucial role to compare and research the interest rates on various financial institutions. Negotiate a lower interest rate on loan and create the business of your dreams into reality. There are three factors affecting business loan EMI like loan amount, rate of interest, and repayment tenure.

Personal Loan Low Interest rate Interest rate 10.25%PA

Business Loan Low-Interest rate Interest rate 14%PA

Home Loan Low-Interest rate Interest rate 8.25%PA

Car Loan Low-Interest rate Interest rate 8.5%PA

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