What Criteria do You Need to Fulfill Before Availing a Business Loan?

 What Criteria do You Need to Fulfill Before Availing a Business Loan?

One can avail a business loan with or without security today, and there are a host of other features to a business loan but all of them depend on the financial institution one is thinking of borrowing from. Banks in India offer loans for both small and big businesses today but one has to meet the business loan eligibility criteria of these financial institutions. Here are some of them:

  • The company has to be Limited or a Private Limited Company.
  • To avail a loan of Rs 15 lakhs, the net income of the company should be more than Rs 1 lakh 50 thousand per annum, and the net income should be more than Rs 3 lakhs to avail a loan of about Rs 15 lakhs.
  • The firm might be a partnership or a proprietorship firm but one has to provide the proper documents for it.
  • A business firm owned by an individual who possesses the required diploma or degree in any discipline of art or is skilled as deemed by the financial institution can be considered for the loan. Chartered Accountants, Doctors and Surgeons, Engineers, Craftsmen, Management Consultants can apply for the loan.
  • The age limit of the applicant should be between 21 to 65 years. In case of some institutions, it is 25 years.
  • The business should be making profit at least for the last two years and adequate documentation to that effect has to be submitted, in the form of the IT returns of the company.

Moreover, one should also avoid aspects that might negatively impact the eligibility of the applicant.

  • One must approach the financer with a good credit score. A poor credit rating can be a greater impediment towards getting a loan that one could possibly imagine. Default payments, outstanding dues and a fluctuating financial history does not bode well with the creditors and unless one is ready to pay a hefty interest amount, one should start work on improving the score.

  • While it is common saying that the professional and the personal are always kept separate in matters of business, which is not always the case. If the applicant has a bad reputation in the market for some reason, or there are allegations of fraudulent activities against him, or if he has ever had criminal charges filed against him, chances are that the banks would not approve the loan.

  • Not having the documents required for business loan in place can also be a huge deterrent. One must have all the educational and professional certificates in place, along with valid ID proof as the first set of documents. Then one should compile the IT returns of the last three consecutive years, along with the business registration certificates. Apart from that, any other documents that the lender might want to see as a part of the application process.
Bajaj Finserv has excellent business loan options in place for small and medium firms and one should avail them for optimum business growth.

What Criteria do You Need to Fulfill Before Availing a Business Loan?  What Criteria do You Need to Fulfill Before Availing a Business Loan? Reviewed by ravish kumar on January 19, 2018 Rating: 5

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