Business Loan FAQ

Business Loan FAQ’s:

•What are the prepayment Charges?
Pre payment charge of 4% to 6% is levied on balance principle outstanding.For what Purposes are Business loans given? Business loans are given towards Working Capital,Short Term Cash Need, Business Expansion,New inventory,Buying Machinery/equipment etc.

•What are the Eligibility Criteria’s?
Entity should be Self Employed with Min Age 25 yrs & Max Age 65 yrs.
Should have vintage of at least 3 years. Should be profit making for the past 2 years Co-applicant required as a Guarantor:

•Who can avail a Business loan?
Business installment loan can be availed by: Self employed individuals / professionals Sole proprietorship firms Partnership firms Private limited companies and closely held limited companies

•What are the benefits of Business loans?
Speedy loan processing – 4 to 7 business days Fast and easy documentation . Hassle-free loans Loans From 10 Lakh to Rs.3 Crore Repay with easy equated monthly installments.

•What is the minimum annual turnover eligibility?
Minimum turnover required is Rs.1 Crore P.A. What is the interest rate charged on BIL? Rate of interest vary from 13 % to 21% depending on loan amount, credit assessment and other parameters.

•What are the basic documents required for applying?
Photographs Identity, Age & Signature verification proof
Business Bank statements for last 6 months 2 year audited financials including Profit & Loss, Balance sheet and IT returns 3 years Business existence Proof Address proof – Residence and Office.

•What is the turnaround time for the disbursal of the loan?
Disbursal of the loan may take a minimum of 7 working days from the time of submission of loan related documents as requested by the Bank

•What parameters are looked into before sanctioning a BIL?

• Liquidity

• Solvency

• Profitability

• Asset Owned

• Track record

• Management

• Business model

•Industry and product/service

What happens if there is an ECS bounce or I miss an EMI payment?

 

The bank will levy certain ECS bounce charges or penalties. Additionally, that will also get reported in your credit report. Depending upon the severity and the regularity of the miss, it may have a serious impact on your future credit possibilities like in obtaining a home loan, car loan, etc. Additionally, banks may also take legal action against the borrower.

What is the rate of interest and processing fee on business loans?

The rate of interest varies from 13% to 23%. The processing fee of up to 2.5% of the loan amount is levied. Additionally, some banks may also insist on insurance cover.

How is a business loan to be repaid?

All business loans are repaid through EMIs or equated monthly installments from the borrowers bank account. The borrower or customer is required to either give PDCs or sign an ECS mandate in favor of the bank disbursing the loan.

Is part payment allowed in a business loan?

Some banks may allow part payment while some others may have restrictions on how many times in a year you can part pay and also the minimum and maximum amounts you can part pay. Again, a clarification is to be sought from our loan advisor during the time of loan processing.

Is pre-closure allowed in business loans?

Some banks have a lock-in-period of six months to one year for the business loan. While some others allow you to pre-close the loan even after the first EMI has been paid. Some banks may have a rule that a borrower can use his own funds to pre-close the loan and not use the balance transfer facility of another bank. Additionally, some banks allow pre-closure at no cost while some others charge an upfront fee of 2-5% of the pre-closed amount. Clarifications on this are to be sought from our business loan advisor during the processing of your application.