Small business loans are offered by a large number of traditional and new-age lenders. You can avail the credit facility in terms of small business loans in India to meet all your business requirements. You can use funds as per the business necessities or for its growth.They can help the business grow, expand to new locations, fund new product line or machinery, enhance sales and marketing efforts, and allow the business owner to hire new staff.
To be able to apply for the best small business loans in India,first, you must know your needs and requirements. This will help you determine the loan amount that will meet all your needs in the best way. You are also in need to look for the right loan lender to be able to get the best services at the lowest interest rates.
Let’s take a look at how you can apply for a small business loan in India.
Step 1: Search Lender
The first step is to search for the lender. There are plenty of options available in the market from whom you can avail best small business loans in India, such as NBFCs, online lending companies, and banks. You need to shortlist a few lenders on the basis of the following:
- Secured/unsecured business loan
- Eligibility criteria
- Documents required
- Interest rate
- Hidden charges
- Prepayment charges
- Loan approval process
- Time taken in the disbursement
All these factors are very important and you can consider them while availing a loan for small business. This will help in shortlisting the best loan lender in India.
Step 2: Check Eligibility
The next step is to check the business loan eligibility. Every lender has different eligibility criteria. You need to ensure that you meet the eligibility of the lenders you have shortlisted. The following is a generic list of eligibility criteria set by most lenders:
- ITR more than 5 lakhs
- Sales of more than 10 lakhs in the previous year
- The business vintage of more than 2 years
You can also check your eligibility on the eligibility calculator provided by the lender on his website. This would not take more than 10 seconds. If you are eligible then you can apply for a small business loan with the lender.
Step 3: Apply For Loan
Now, you have to apply for the business loan with the lender. You have to fill the business loan application available on the lender’s website. Or if you have applied for a loan with a bank, you will have to personally visit the bank branch to fill loan application. That said, it would not take more than 10 minutes to fill an online loan application. Also, you will not have to personally visit the lender’s office which will save you time.
Step 4: Submit Documents
After you have applied for a small business loan, you next have to upload the documents required by the lender. Every lender has different documents requirement. But they all generally require PAN, address proof (house and office), bank statement, and ITR. If you have applied for a loan with a bank, you have to submit the hard copies of the documents in the bank branch. However, if you have applied for an NBFC business loan, you can upload the soft copies (PDF format) of the documents on the loan lender’s website.
Step 5: Approval & Disbursement
After you have applied for a loan and uploaded the required documents, the lender will process your loan application. He will verify all the information provided and documents uploaded to check your eligibility. If you are eligible for a business loan in Delhi or any other city for that matter, your application will be approved. You will be informed about the same and the loan amount will also be disbursed.
All the aforementioned steps will help you in availing the best small business loans in India.However, as said earlier, determine your needs and know the amount that you need. Also, the CIBIL score is the most important parameter upon which almost all lenders check and verify the borrower’s creditworthiness. So, you need to also ensure that your CIBIL score is more than the one required by the lender. And if it is not, you can work towards improving it.