Mumbai and Delhi are major metropolises that have been the hub of exponential growth. These bustling cities are synonymous with big-time businesses and corporates flooding the markets. The new age of transformations has made it easier to avail of a small business loan in these cities and get it approved instantly.
Business loans accrued without pledging for any collateral are termed unsecured business loans. Business owners are often wary of getting secured loans hence unsecured business loans are the best alternative. These loans act as a quick fund supplementing the gaps related to cashflows, working capital as well as managing inventory or purchasing new equipment.
The process of acquiring a small business loan in Mumbai or Delhi requires meeting several yardsticks. The same is as discussed below:
Existence of the business or firm
A business must showcase that it is up and running for a few years. The longer it has been running, the higher are the chances of receiving funds. For a new business, it gets difficult to avail of a loan.
The tenure varies from bank to bank or other lending institutions. The minimum duration cited being 1 to 2 years at the most. This assists in giving the banks or financial institutions a performance track record to check the credibility aspect before offering a loan.
A business to be eligible must fulfill the criteria of maintaining an annual banking credit. This ranges to a minimum of Rs. 5 lakhs a year or approximately to the tune of Rs. 1 lakh for the past 3 months around the date of availing a loan.
The borrower must be within the age limit of 21 to 65 years old.
Income Tax Returns
This is a requirement wherein the applicants are mandated to file their income tax returns for passing the eligibility criteria. The amount is often demarcated where income tax returns over and above Rs. 1.5 lakhs an annum is considered eligible.
The location of the business plays an integral role. Wherein blacklisted locations are rejected citing the risk ratio. Areas where recovery agents are not permitted, as e.g., Dharavi in Mumbai or any other slums in Delhi. These areas are out of bound for availing of a loan. Since these areas pose a security risk during the event of a recovery.
The business owners need to chalk out a repayment strategy. This can be done through the usage of an EMI calculator. Where the principal loan amount is entered to calculate the monthly interest rate and the duration of the loan. This gives an idea of the breakdown of interest per term and helps you plan the cash resources accordingly.
A good credit score increases the chances of a loan getting sanctioned. Thus, the focus should be on improvising the credit score.
NGOs and other charitable institutions are excluded from the eligibility list.
Business Loan Documentation
The list of documents for a small business loan necessitated for the facilitation of an application is not very elaborate. This includes a PAN card, Aadhar card, bank statement for the past 12 months along with address proof of the borrower.
Decoding other Considerations
There are several other considerations to be taken into account which is listed as below:
The process of securing a loan in Mumbai or Delhi depends on product or service competitiveness. This checks whether the business has demarcated a niche for itself or is at par with businesses in the same field. Passing this criteria sanctions an unsecured loan even faster.
Unsecured loans being collateral-free loans are dependent on the amount that is sought as a business loan. If a company boasts of strong and secured financial health, accruing a modest amount of loan is easy.
This necessitates checking and rechecking the repayment modules and whether the company has the capability of availing a loan bypassing all the mandates.
Securing the Loan
The question of how to get a business loan in India has only one answer. This is opting for a loan from any financial institution or a bank. Especially the ones you have done business with. This brings in familiarity with the lending organization. Hence the loan process is facilitated faster.
Advantages of a Business Loan
The answer to how to get a business loan in India is easier in case if it is an unsecured loan. Most of the businesses can avail loans without showcasing their assets or collaterals. Thus, the possibility of losing assets is alleviated.
Unsecured loans are sanctioned faster by banks or any other lending institution. Thus, making it more convenient for any business owner. The application process is followed up by evaluation to check the creditworthiness. Once approved, the loan is disbursed within a span of 3 to 4 days at the most.
The paperwork is almost next to nil. This is due to the technological advantage wherein everything is done at the click of a button. With the application process moving online, the same can be covered in a very short time.
A business loan in Mumbai can be availed by following the few steps mentioned below:
A business owner has to fill in an application form on the given website of the bank or financial institution, they have zeroed in on.
Submission of Documents
Once the form has been filled in, one has to submit the required documents. This has to be rechecked as one single mistake can land a loan application form being rejected.
This sees a representative evaluating the application a few hours after submission. This is to check the creditworthiness of the applicant.
Once the loan is approved and all the criteria are fulfilled the loan is disbursed to the bank account of the applicant within 3 to 4 working days. This is preceded by the step of the signing of the contract by the borrower.
Mumbai and Delhi boast several bank branches and NBFCs to cater to the ever-growing financial needs of businesses. Both Mumbai and Delhi stand out for the multiple opportunities that make it easier for availing a loan.
There are many options to acquire funds from the right lender for expanding the business. One has to keep in mind that since unsecured loans are collateral-free loans, the interest rates are always higher for this type of loan.