Whether it may be a startup business or an established one, monetary needs are a very common phenomenon for any business. Money is needed for starting a business as well as to expand it. The best way to get money for business is a Business Loan.
What is a Business Loan?
A business loan is a financial instrument specially designed to utilize in business purpose. A self-employed proprietor, as well as entities such as partnerships, private and public limited companies, can go for a business loan. A business loan can be used in starting a business or bearing the expenses of continuing a business. A company can use the loan amount to expand his business, buying new equipment, Opening an additional branch, hiring a new batch of employees etc.
There are many benefits of a business loan. One can apply for a business loan without any collateral. Most of the business loans are unsecured loans. It doesn't even require any guarantors. Most of the banks offer the provision of pre-payment with a minimal charge. In the case of defaulting the loan, not the company owner but the company itself will be considered as a defaulter and in extreme cases, the company will be put in an auction by the lender to reimburse the lent amount.
Gathering adequate fund for business is a problem faced by most of the growing entrepreneurs in India since long back. There are a number of methods that entrepreneurs use to have the required fund. Some of those are angel funding, letter of credit, venture capital fund and so on. In India, the most popular way of getting finance for business is a Business Loan.
There are many banks which provide a business loan. Among all of them today we have picked the 5 most chosen business loan providers.
#1-HDFC Business Loan
HDFC bank provides business loan up to 50 lakhs, which they claim to disburse it very fast. HDFC finances start-up companies as well as large-scale companies with a business loan. No collateral is required for applying for this loan and one can repay the loan within 12-48 months. HDFC also provides an overdraft facility. An entrepreneur will be considered eligible for HDFC business loan with a minimum turnover of 40 lakhs and a business history of at least 3 years. The business loan rate at HDFC bank is 15.50% to 18.30%.
#2-Bajaj Finsrev Business Loan
Bajaj Finsrev offers business loan upto 30 lakhs at the interest rate of 16% -35%. One can apply for apply for a Business Loan at Bajaj Finsrev after three years of business establishment. The best feature of this loan is that there are no foreclosure or part payment charges. This loan is once again collateral free loan one can even enjoy the benefit of Line of Credit. They offer special offers for women entrepreneurs. Bajaj Finsrev business loan comes with an online access which makes it very easy to handle.
#3- ICICI Smart Business Loan
This is basically an overdraft facility of taking a loan up to 25 lakhs to its existing customers. This is an unsecured loan and minimum 5% of the utilized amount to be repaid every month. There are no foreclosure charges but a balance transfer will attract 4% of the outstanding amount.
#4-Capital First-
The Capital First business loan is among the popular business loans in India. It provides business loans from 3 Lakhs to 75 lakhs which is the highest among all above-mentioned lenders. The tenure of this loan is 6 months to 36 months with a reducing interest rate. One can apply for a business loan at Capital First bank with a business history of 3 years.
#5-Kotak Mahindra Business loan-
Kotak Mahindra Bank encourages entrepreneurs by providing business loans from 3 lakhs to 75 lakhs. With such a huge amount one can expand his business which will earn more profit. This loan is approved quickly with minimal paperwork. There is an eligibility criterion for the applicants from different businesses.
Self-employed business people with an annual turnover of Rs. 2 Crores
Manufacturers with an annual turnover of Rs. 1 Crore
Service Providers with an annual turnover of Rs. 50 Lakhs
Bank loan for new business is essential to kick-start any business. The initial years of any business is the toughest time span which the proprietor has to cross successfully. A Business Startup Loan makes the owner of the business run and expand his business well. Though it is true that Business Loan Rates are bit higher than a home loan or personal loan but if a person can utilize the loan in the most productive way than this will undoubtedly multiple the amount within a short time. Let the innovative ideas of your mind be executed through your own start-up business. You can apply for small business loan at any of the above-mentioned banks. Get a business loan and be your own boss. Happy Borrowing!