With the introduction of Atmanirbhar Bharat Abhiyan, the government is encouraging the masses to start their own business. The definition of MSME has also been revised for the same.
However, USA SME and MSME sectors require significant financial assistance to reach its true potential. While there are several ways to secure the capital required for a company, the best option is to get a business loan.
Other options to secure business capital include crowdfunding or approaching investors and venture capitalists. But they are very time-consuming, and often come with steep interest rates.
Who provides business loans?
Business owners can avail of these loans from two places, Government-backed financial institutions, and NBFCs. NBFCs are not as strict with documentation and eligibility as conventional Government-backed financial institutions. Business owners can get their loan requests approved within a day by submitting only a few documents. It is fast and easy to get this loan from NBFCs. Time management is essential to becoming a successful business owner.
Eligibility and required documents for applying
It is crucial to know whether you are eligible or not before submitting a loan application. To avail a business loan,an applicant has to-
Be between 25-55 years old.
They should file an Income Tax Return for the previous year.
Existing business owners can also avail this loan provided their company is at least three years old.
The essential documents include –
KYC documents like Aadhaar, PAN, Driving License, Voter ID, passport, etc.
Proof of business ownership existence.
Address proof like Electricity bill or trade license.
Previous month’s bank statement and other relevant financial documents.
Impact of interest rates
Low business capital is the reason to avail a business loan in the first place. Many NBFCs provide flexi Loan facilities where one can withdraw from the available credit limit as per their needs. One can pay the interests as EMIs and the principal amount at the end of the loan tenor. It can be the ideal way to meet working capital needs.
This facility is ideal for new businesses as one only needs to pay interest on the amount withdrawn,which helps lower the number of EMIs substantially. They even provide a business loan emi calculator that helps determine how many EMIs you have to pay even before you take the loan.
How to apply?
NBFCs offer hassle-free online application processes. Usually, it takes approximately 2 to 3 working days to approve and disburse the credit. A quicker approval and disbursement allows entrepreneurs to secure the credit and utilise it to pay for both unforeseen as well as planned expenses.
To apply for a loan in an NBFC,one has to-
Visit the business loan page of their lender of choice.
Go to the apply section.
Enter all the mandatory details and click “Submit.”
Once these above mentioned steps are done, a representative of the respective financial institution will contact you for collection of all the required documents.
To make the loan availing process more accessible,reputedNBFCs like Bajaj Finserv provide pre-approved offers to existing customers. Such offers usually accompany financial products like personal loans and business loans. One can check their pre-approved offer by sharing their name and contact details online.
Availing a business loan from a well-known and reputed NBFC is the smartest as well as the fastest way for an entrepreneur to secure funding for their organisation. Access to adequate funds as well as borrower-friendly terms can help their organisation attain the necessary growth with ease.