Small and medium-sized businesses are an important part of the Indian economy. The Government has taken several measures to promote the growth and development of SMEs across India. Several lenders in the country offer loans to help the business grow in every manner possible. An SME business loan is specifically designed to meet your business needs. Whether you want to enter a new market or invest more into marketing, you can do so with the loan. Lenders have varying eligibility criteria you need to be aware about. Based on the same, you can make a loan application.
Eligibility criteria
• Sole proprietors, partnerships, private limited firms and public limited firms are eligible to apply for the loan.
• Minimum age of the applicant is 21 years and maximum age is 65 years.
• The business should be making profit for the past two years.
• Applicants should have an experience of five years in the industry and of three years at the current business.
Documents required
• Identity proof
• PAN card
• Address proof
• Bank statements for last six months
• Partnership Deed
• Incorporation Certificate
• Articles of Association
• Shops and Establishment Certificate
• Audited financial statements for the last three years.
You need to identity the purpose of borrowing and the amount of funds you require. It will enable you to make the right borrowing decision. Compare the interest rate offered by different lenders and chose the one that has the lowest rate. It will reduce the amount of EMI and will make it easier for you to repay the loan. You need to consider your monthly outflows when agreeing on an EMI amount. You can ask for a longer tenure if you need a low EMI amount. The loan may or may not require a collateral.
The loan application can be made online and you can submit the documents online. The loan will be processed and approved within 10 to 15 working days. If you have a good credit score, the loan will be approved in no time. In case of a collateral, you might have to wait for some time because the lender will ask for the valuation of the asset before agreeing on a loan amount.
SME Business loan can help you take your business to its potential. You can make the most of the upcoming business opportunity and expand market reach. The Government has beneficial terms and conditions for the loan, making it an ideal option for business owners. Irrespective of the products you trade in or the services you provide, the loan will be an ideal fit for you. It will ensure that you turn your aspirations into reality without disrupting the budget. Remember that timely repayment of loan will help build a strong credit score. Make a repayment schedule and ensure that the loan is repaid in equal installments within the tenure. SME loans have long and flexible tenure, making it easy and convenient for you to make the repayment in due time.