Business Loan

Financial Flow is the life blood of any successful organization. Most businesses will need a large amount of working capital to start up a new business or enable the rapid growth of an existing business. Scaling up always requires a influx of finances.

Which is why, we go to all lengths to ensure that we can disburse a loan that can help you take your business to the next level. Business loans are very special to Star india and we have been helping our customers scale to new heights of success by helping them finance their dreams for their enterprises.

While a personal is given on a personal capacity and income, a business loan is given based on company’s income and capacity and is given in the company’s name.

Business loans are categorized broadly into following 2 segments.

1. Unsecured business loans– 3 year term loan for proprietorship, partnership, private limited companies and limited companies based on a sound balance sheet.

2. Secured business loans– Working capital funding in rupees as well as foreign currency for proprietorship, partnership, private limited companies and limited companies

Business Loan Eligibility Criteria

Most banks have a common set of parameters that they evaluate loan applicants with, but what exactly these parameters are depends from bank to bank.

Business loan eligibility depends upon various factors which differ from bank to bank. The main factor of course, is your ability to repay the loan. Banks that offer business loans will run extensive checks on your business, profits, financial statements and scope of success. For example banks will assess your repayment capacity with the kind of organization you have built.

For your benefit, we have put down some of the main things to take care of to ensure you are eligible for a business loan. Keep the following points in mind to ensure your application goes through.

Age Age plays a role in the eligibility and repayment capacity of the individual. Banks generally give out business loans to self employed individuals/business owners that are typically between the ages of 24 to 65 years.

Stable and Sustainable Business

A stable business record goes a long way in improving your eligibility for a business loan. Individuals applying for the loan should have been running their business (the one for which you need a loan) for a minimum of 3 years. Apart from this, you should have been involved in managing stable businesses for a minimum of 5 years to increase your chances of securing a loan.

Financial Statements Current and previous financial statements of your company are used by the bank to evaulate your repayment capacity. These are very crucial. Any kind of financial instability due to mismanagement is frowned upon and can reduce your chances of being eligible for a business loan. Clean and well maintained balance sheetsthat show financial stability and sensible transactions helps in improving your eligibility for a business loan.

Outstanding EMIs Any pending EMIs at the time of applying for a business loan are likely to reduce your eligibility in terms of maximum amount or even loan disbursal. Since the amount is calculated on basis the EMI, you can possibly repay the contributions towards other outstanding loans to reduce the total business loan amount drastically.

Current Business Experience

Banks will prefer that your business has been showing stable signs of growth at least for the last 3 years. If you can show sustained billing and revenues and top it off with profit, getting a business loan should not be a problem for you. Some banks give a loan amount up to 60 to 80% of your median annual profits.

Total Business Experience

A bank will prefer if you have been engaged in sustainable business for at least 5 years to consider giving you a loan. Your diversity in terms of business experience and so on along with good results will help you acquire your business loan.

Documents Required • Identity Proof
• Address Proof
• Bank Statement (Latest 6 months)
• Latest ITR along with other relevant docs like Balance Sheet, P&L, Audit Report (Certified by a CA)
Tenure

Business loans range from min. of 1 year up to a max of 4 years Processing Time The processing of the loans usually takes 4 working days after all the documents are submitted. Pre-Payment You can pre-pay the loan after repaying a min. of 6 EMI’s. Foreclosure charges would be applicable as per the banks term and condition. You can make a part pre-payment with a minimum amount of Rs.50,000 after 6 months from the date of disbursement of the loan. This part pre-payment can be made only once in a financial year.