Business Loan Eligibility
Business Loan Eligibility
A business loan is a loan that is used to start a new business, expand the working capital, fund new equipment or machinery, enlarge a business, or recondition an existing business. It is offered by many banks, financial bodies, or Non-Banking Financial Companies NBFCs to meet the needs of business. The individual can avail up to the maximum loan amount of Rs. 2 crores at an affordable rate of interest of 14.00% for a maximum repayment tenure of up to 36 months.
Eligibility Criteria for business loan
The age criteria of the borrower should be between 25 to 65 years of age.
Income Tax Return (ITR) must be filed for a minimum of 1 year.
Cash flow should be positive for the organizations.
Business Loan Eligibility must have a minimum of 3 years of continuation.
Business or sales turnover should be audited by a registered Chartered Accountant.
Factors affecting business loan eligibility
Nature of business
Borrower's age
Business Loan or sales turnover and Vintage
Repayment capability and creditworthiness of an applicant
Loan defaults (if any)
Business profitability or stability
Borrower's source of income, financial history, or credit score
Who can opt for a business loan?
For a proprietorship firm: - The company should have profit and loss statements to fulfil the criteria of banks.
For self-employed professionals: - The professionals like Management consultants, doctors, CA, engineers, etc. have to show proof of qualification.
For private limited company: - The net annual income should be more than Rs. 1.5 lakhs for loan up to Rs, 15 lakhs.