What is a business loan?

Posted by KushiBL on March 27th, 2020

What is a business loan?

A business loan is taken from the bank to start a business or expand an existing one. This money has a percentage of interest and is payable in a fixed period.  However, loan aggregators help you with the best repayment options for a good 5 years. Explore Buddy Loan in order to reap more benefit for a business loan.Apply Instant business loan online.

This loan can be an unsecured personal loan that you may apply against another income that you have. To get this loan, you may sometimes have to give collateral, but in other instances, you will get a pre-approved loan without any hustles.

Business loans can be advanced to customers with different profiles, and they will take into consideration the ownership of the business, whether its registered and what its form of registration is. Professionals are also allowed to borrow business loans to expand their consultation businesses. However, banks have prerequisites that they consider when you are applying for a business loan

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• You have to have a solid business plan for the money you are borrowing
• You have to have an asset base that will serve as collateral for the loan you are asking. The higher the amount of credit, the more the guarantee
• You have to have sound industry experience as this almost assures them of your growth and success
• Your business has to have good credit
• You as the entrepreneur has to have a good credit score that will be ascertained from CIBIL

Types of business loans

•       Line of credit loans
• Interim loans
• Secured and unsecured loans
• Balloon loans
• Letter of credit
• Alternative financing
• Instalment loans

Business loans may be used  to:

• Start a business
• To expand an existing business
• To improve the machinery and tools
• To develop human resources and abilities of the business
• Eligibility for a business loan
• Proof of identity

Business loan requirements

• Income: You will have to show proof of income from your business continuity
• You need to have six months bank statement that will demonstrate a turnover of INR150000
• You need a board resolution in case of a limited company or co-borrowers details and authorization letter.
• Financial documents: Statement of computation of the business income for at least two years and an audited profit and loss account statement
• Should be a citizen of India

Age limit: You have to be of at least be  21-65  years

Steps

Advantages of business loans

Business loans in India attract a tax benefit. Loan aggregators such as Buddy Loan help you reach with ease. When you get a profit, and you pay for your credit it is treated as an expense and therefore

• The loans are accessible and convenient
• Business loans offer multiple loan options for their customers
• Affordable loans
• Business loans
• Business loans in India
• Quick business loans
• Affordable interest rate
• Banks do not share in the profit you make, unlike angel investors and venture capitalists
• Business loans have lower interest rates.