Procedure to apply for offline business loan for small business. How to Apply Offline for Small Business Loan in India

How To Apply A Business Loan Offline For Start A Small Business –

When you plan to start any type of business whether it is big or small, every business needs capital. Therefore capital is the basic foundation to start and take it to forward any business.. It is not necessary that every person have money to start business, and they cannot do business, if they have no money, it is not so at all.

Friends if you have no money to do business but still you want to start business then you can get a business loan. Here I will let you now about loan. .

There are many types of loansĀ  which are given by financial institutions. Even the government is also giving loans to increase small business.

The only difference is that everyone has their own terms of loan and their own rate of interest. We will tell you how to take a loan for small business. By the way, the government is also providing online loan application for small scale industries in 59 minutes.

Information of business loan

Loan means lending in common language. The only difference in this loan is that, it has to be taken from a particular company or a private company or bank. The loan has three main grounds:

Principal Amount – Principal amount, is the amount that is being taken as a loan. Whatever amount of loan is received after applying, it becomes the principal amount.

Rate of Interest – It is most important that at what rate the interest is charged on the principal.

Duration of Loan – It is very important to keep in mind the duration for which the loan is taken and what is the last limit.

Eligibility of Business Loan –

Before taking a loan, every bank has a plan for loan, in which it is decided which person is eligible to take a loan. The information related to this is as follows –

The condition of any loan is that whoever is taking a loan should be a citizen of India. He should be more than twenty-four years old and less than fifty eight years old.
The person is in a normal state, that is, he does not have any type of mental or physical serious illness.

Document Requirement of Business Loan

Whether government work or private loan, some documents are important for your identity. The list of loan documents is as follows:

  • Passport size photo
  • Copy of aadhar card
  • Pen card copy
  • Copy of the last three years sales tax return
  • Copy of income tax return of last three years
  • Bank account details
  • Project report
  • Estimated accounts details for the coming years
  • Credit Monitoring Arrangement Data (CMA data, if required)
  • Property paper or any liquid assets as security
  • Two guarantors are also required for the security of the loan.

Important Points for Business Loan –

It is very important to pay attention to the information related to taking any loan, the main among them is as follows-

Business Plan – Before starting a business, a complete plan should be made, what items to trade, how much capital to invest, set expenses limits and profit margins. Take care of all these things and do business, so that there is no loss.

Income of Source – It is important to look at the medium of income of any person who is being given a loan. Through which means he is getting income and, how much income he is getting or the business he is taking loan for and how much income he will get from it. So that it can be known whether he will be able to repay the loan given or not.

Down Payment – Whenever you want to take a loan, first see its down payment. The down payment, if we understand in general terms, is the amount of loan that will be received later. So the conditions related to this should be understood, so that there is no problem in the future.

For example, we applied for a loan of fifteen lakhs. Of which, we got three lakh rupees as soon as we took a loan, but later it is necessary to understand how we will get the down payment of twelve lakh rupees.

Rate of Interest – Before taking a loan, the rate of interest should be ascertained. We should know at what rate the interest is being charged. And find out the interest in different banks. It has also happened many times that people had to pay more interest than the original. If the rupees are not filled, then the interest is charged at the compound rate.

Equal Monthly Installments (EMI) – After taking a loan, there is a process to repay it, which is to make installments every month according to your income, which is called EMI. In which the amount of both principal and interest is added. And it has to be paid every month according to the installment made or it is deducted from the deposit in the bank account.

Age – Age is also seen to take a loan, wherever a person is taking a loan, his age should be to repay that loan.

Process to apply for small business loan in India :

To process the loan in the first phase, bring the form from a bank, read it well and understand it and then fill it.

Collect all the documents appearing in it and attach a photocopy of every document, do not attach the original copy of any document with it.

The two guarantors that we are taking for the sign should be trustworthy, so that there is no problem in future.

We should also know the market value of any immovable property we are keeping as security.

After taking the loan, understand the time period from the bank for the down payment and ask for it according to your need.

Profit & Loss of Business Loan –

Business Loan Benefits – No person has to think for business, by taking loan, all his problems are eliminated, its benefits are as follows-

  • One does not have to think about capital or its relation to start any business, easily loan can start work. It helps in meeting all the expenses related to the business.
  • The loan is available at a lower rate of interest than the market rate. Which gives the benefit of large capital at low cost. And can be used for a long time. The minimum period for repaying the loan is at least one year and the maximum period is up to five years.
  • There are some changes in it every year according to the time, which is important to see.
    After the start of business, the work can be carried forward with a down payment (advance payment). And the capital rotation goes right.
  • As much business as capital is there, there is not much damage. Loans are easily available from every company and banks.
  • It is also available in income tax. We can also take advantage of loan exemption while filing income tax returns.

Business loan drawbacks –

If the loan is taken without a plan and is not repaid in time, then it also has to bear the loss as follows-

The biggest disadvantage of taking a loan from a bank is that the interest rate is very high. It is more expensive than the original.

After the down payment of the loan, it takes a lot of time and its amount gets easily in small installments.

If the loan amount is not repaid, then the property is auctioned.

Business Loan Interest Rate –

Every bank has its own different interest rates, which is very difficult to understand. Here we are telling the rates of some banks together, which will make the comparison very easy.

Every year there is some change in the rates of har bank interest. Whenever you want to take a loan, you must know the rate of interest for that year, after that process the loan.

Interest rates in the name of banks

Allahabad Bank 11.10%
Andhra Bank 15.75%
Bank of Baroda 14.10%
Bank of Maharashtra 14.50%
Citibank 15.99%
Corporation Bank 13.55%
Dhan Lakshmi Bank 13.15%
HDFC Bank 15.50%
ICICI Bank 15.50%
IDBI Bank 13.00%
Indian Overseas Bank 14.90%
Kotak Bank 16.00%
Punjab National Bank 12.65%
State Bank of India 11.20%
Syndicate Bank 12.50%
United Bank of India 13.00%
Yes Bank 16.25%

(Note : Above rate of interest may vary time to time, please verify at the time of applying for business loan)

Prime Minister’s Employment Generation Program (PMEGP) –

Under this Prime Minister Scheme, a loan has been arranged for small business, so that every person who is thinking of doing business can do business.

Key points of this plan –

People over eighteen years of age and below the age of thirty five years can participate in this scheme.
Those families whose combined income is less than twenty four thousand, they can take advantage of this loan.
In this loan, the government has almost removed the barrier of literacy, even people who pass 8th and 10th can take this loan.
The government has fixed the minimum limit of this loan to two lakhs and maximum limit of twenty five lakhs. The important point in which is that there is no need to keep any property as security. And this loan will be available for at least seven years.
The biggest benefit of this scheme is that in this the government has also provided subsidy which has kept fifteen to thirty percent of the project cost. But in this subsidy is given according to the category-

If you fall in general category and start your business in a city (urban area), then you will get fifteen percent subsidy. But if you do this business in a rural area, by increasing this subsidy, you will get up to twenty five percent. But in the general category you have to deposit ten percent of the project cost.
Scheduled Castes, Scheduled Tribes, Minority People, Women, Retired Government Employees, and People with Disabilities category residing in Border Area and Hill Station are all placed in Special Category. In which if you do business in a city, then twenty five percent and if you do business in a village, then subsidy of up to thirty five percent is given. Apart from this, you have to submit only five percent of your project.
Prime Minister Mudra Yojana (Pradhanmantri Mudra Yojna) – This scheme has been kept by the government for all those people who want to do business or are doing it, they want to increase it further. In this scheme also, the government has taken special care of the convenience of the people and loan will be given without taking any guarantee in it. With this, no fees will be charged for any kind of loan procedure. An adequate period of five years has been kept for its repair. The government has divided this loan into three parts.

All other documents in the government loan will be the same as that used in normal loans. But in this caste certificate, residence certificate, address of place of business it is mandatory to give.

The government started this facility to end unemployment and similarly, taking loans helps a lot in doing business. And every person who will do business by planning, he will definitely get profit and business will grow.

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