Business Loan

A business loan is also known as a commercial loan and is usually meant for the businessmen, traders and professionals to tide over unfavorable situations and phases of business. The purpose of these loans is mainly to start, expand or facilitate the business. These sorts of loans are usually available to professionals such as architects, CA, doctors. The most attractive features of business loans are its low equated monthly installments and attractive rates of interest. The source of business loans could either be a nationalized bank or even a private lender. It depends on the borrower's capacity to repay the loan and the Terms and Conditions put forth by the lender.

Types of business loans

Basically there are two types of business loans, namely professional loans and trade loans.

Professional Loans: These types of loans are for self employed professionals. This category includes the interior decorators, chartered accountants, doctors, company secretaries and architects. These loans are at a lucrative rate of interest. The nature of this loan is unsecured and so trading/ manufacturing/ processing units cannot avail this loan.

Trade Loans: Nowadays, if anyone wants to start a business a heavy initial investment is required. Nowadays, the working capital has also increased. Tiding over this sort of situation is the main aim of providing the trade loans to the businessmen and traders.

Maximum amount offered

Again the maximum amount of loan that is offered depends on the types of loan and various other factors such as the Terms and Conditions of the bank, financial status of the borrower, the tenure of the loan, capacity of repayment by the borrower, etc. The maximum amount in a professional loan varies from Rs.25000 to Rs.25 lakhs. The EMI is the most convenient way of repaying any professional loan. In some of the cases a tangible collateral security has to be provided. Incase of trade loans the upper limit of the loan can be Rs.100 lakhs. The financial capacity, age and the ability to repay the loan determine the amount and tenure of the loan. Trade loans can be returned within a maximum time limit of 5 years.

Interest Charged

The prime lending rates decides the rate of interest charged. The rate of interest can either be fixed or fluctuating. The fluctuating rate of interest is sometimes referred to as floating rate of interest. If the customer's profile and monetary status is on a positive note the interest may be discounted. Usually the diminishing balance is the basis of calculating the interest.

Documents Required

Some of the documents that are usually mandatory for getting a business loan are as follows
» Proof of address: This includes the electricity bill, ration card, or the passport.
» Identity proof: This includes voters ID card, passport copy, or driving license
» Bank statement: This should have entries about the last 6 months.
» Papers about the income tax returns
» Proof about the educational qualification of the applicant
» Continuation Proof: This includes establishment, trade license or sales tax certificate.
» Other Mandatory Documents such as declaration of sole proprietorship or copy of partnership deed or copy of AOA/ MOA/ Board resolution.

Product Type :

Loan Type :

Residental Status :

Indian NRI

Full Name :

City :

Mobile No :

Code	Phone No.

Landline No :

Code	Phone No.

Email :

Monthly Income :

Date of Birth :

Employment Type :

Loan amount :

Loan Purpose :