Question 1

What is a business loan, and how does it work?

Accepted Answer

This loan covers business-related expenses. Once you receive it, you can pay the borrowed amount in equal monthly installments.

Question 2

What types of business loans are available?

Accepted Answer

There are two types of business loans, secured and unsecured. Secured business loans require assets such as property, machinery, etc., whereas unsecured loans are offered based on the business profitability and other criteria.

Question 3

How can a business loan help my company grow?

Accepted Answer

A business loan can provide the capital needed for expansion, improve cash flow, and enhance a company's credit profile.

Question 4

What is the minimum and maximum loan amount I can get?

Accepted Answer

There is no specific minimum bracket for a business loan, but it can go up to Rs. 1-2 Crores.

Question 5

Can startups apply for a business loan?

Accepted Answer

Yes, startups can avail of business loans through government schemes like Pradhan Mantri Mudra Yojana (PMMY).

Question 6

What is the typical tenure for a business loan?

Accepted Answer

Business loan repayment period goes up to 10-15 years depending on the lender. A longer tenure helps you manage EMI payments under your planned vision.

Question 7

How is the interest rate determined for a business loan?

Accepted Answer

We evaluate your business loan interest rate on the basis of: Size of your business, creditworthiness, cash flows, and more.

Question 8

Is collateral required for a business loan?

Accepted Answer

Yes, collateral is needed for a business loan if you are applying for a secured type of loan.

Question 9

Can I use a business loan for any purpose?

Accepted Answer

No, you can’t use the amount for anything other than business purposes. The bank will trace the amount you use to ensure legitimate activity.

Question 10

How long does it take to get a business loan approved?

Accepted Answer

A business loan can be approved in a few days to a few weeks. Track your loan status for more accurate tracking.

Question 11

What are the eligibility criteria for a business loan?

Accepted Answer

There are basic requirements for a business loan: Indian citizenship, appropriate age (21-60 years), decent turnover, minimum credit score.

Question 12

Can I get a business loan with a low credit score?

Accepted Answer

Yes, consider NBFCs for your business loan request. And provide collateral to strengthen your profile.

Question 13

What documents are required to apply for a business loan?

Accepted Answer

You will need a bunch of documents for a business loan application: Proof of ownership, balance sheet for the last three years, ITR report. Go to your lender’s profile for a detailed view on the list of documents.

Question 14

Do I need to have a minimum turnover to qualify for a business loan?

Accepted Answer

Yes, you need a minimum turnover to apply for a loan. This criterion may vary lender to lender, so check with them before applying.

Question 15

Can a sole proprietor apply for a business loan?

Accepted Answer

Yes, a sole proprietor can apply for a business loan.

Question 16

Will my personal credit score impact my business loan approval?

Accepted Answer

Yes, it can affect your loan approval. So run a credit check before applying for a business loan.

Question 17

Can I apply for a business loan without audited financial statements?

Accepted Answer

Yes, you can apply for a business loan without audited financial statements, as we assess eligibility based on your past transaction history.

Question 18

How does my business vintage affect loan approval?

Accepted Answer

The age of your business can impact loan approval. A vintage business may have a better chance of securing loans due to its stability and experience in the market.

Question 19

Is GST registration mandatory to apply for a business loan?

Accepted Answer

GST registration is generally mandatory for businesses that surpass a certain turnover threshold or are involved in specific types of services and goods.

Question 20

Can I apply for a business loan jointly with a partner?

Accepted Answer

Yes, it is possible to apply for a business loan jointly with a partner. This can increase your chances of approval and may provide access to a larger amount of funding.

Question 21

Can I repay my business loan before the tenure ends?

Accepted Answer

Lenders allow you to close the business loan early. But do check the closure charges beforehand to avoid any hefty penalty.

Question 22

What is the foreclosure process for a business loan?

Accepted Answer

To close a business loan, follow the below steps: Contact the bank/NBFC, learn their process, write a cheque of the closure amount, submit the cheque and wait for the approval.

Question 23

Is there a penalty for prepaying my business loan?

Accepted Answer

Yes, some lenders impose a prepayment penalty on business loans. It's best to review your loan agreement or consult your lender for specific terms.

Question 24

Can I make partial prepayments on my business loan?

Accepted Answer

Yes, making partial prepayments on your business loan can reduce your total interest paid and shorten the loan term. Always check with your lender for specific terms.

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