What is a Business Loan?
A business loan is a borrowed amount that is used for different business needs like
business expansion, buying new inventories and machines. Whether you are a wholesaler,
retailer, or manufacturer, a business loan can help you to meet your day-to-day operational
needs.
Getting a business loan from one of the most trusted NBFCs in India can guarantee a quick
disbursal of payment, assurance of no hidden cost, minimal documentation and complete
transparency. Without compromising the current operations, a business loan facilitates the
provision of urgent funds to meet immediate business requirements. Regardless of what
the requirement may be, having a quick and hassle-free access to funds is an obstacle in
most such cases. Business loan for women also helps them to get financial help whenever
they needed.
Indeed, there are a lot of traditional lending institutions offering small business loan in
India to businesses. However, when it comes to small businesses, the scenario tends to
get a little difficult. This is because traditional lenders mostly offer business loan on the
basis of collaterals which most of the small businesses are unable to furnish. As a result,
there is a certain need-gap for the availability of credit to these small businesses hindering
their growth and expansion.
Types of Business Loan In India
From Capital (or term) Loans to meet your day-to-day requirements to Merchant Cash
Advance Loans to expand your customer reach, select one of these business loan options
from this list to get your work done. The type of loan will help you determine how to get a
business loan approved in the shortest time.
Term loan:
Term loan provide flexible repayment options on low-interest rates. With Indifi, you can get
up to Rs. 50 lakh with the lowest processing fee of 3%. The payment options are highly
flexible with the longest permissible tenure of 36 months (3 years). It comes with an
astonishingly low interest rate on a business loan of 1.5% per month to reduce the pressure
of repayment.
Working Capital Loan:
Working capital loan is taken to meet the short-term cash shortage or when the business’s
cash is not enough to take care of the day-to-day operations. Nowadays, financial
institutions offer collateral-free working capital loan that are usually taken for 6-12 months.
Machinery Loan:
A machinery loan is a type of business loan that finances the purchase of any new
equipment or machinery. Technological advancements are creating innovative, state-of-
the-art equipment every day. Such equipment makes business processes productive and
efficient. By availing machinery loans, businesses can upgrade to better-quality equipment
that can provide faster turnaround times, help in meeting production targets, and
ultimately gain customer trust. This, in turn, helps businesses increase their sales and
garner more profits. Any individual or business involved in the production of goods is
eligible to apply for business loans.
Invoice Discounting:
Invoice Discounting allows small businesses to borrow funds for the short term. It is often
used as an alternative form of a business loan due to its features. By submitting the unpaid
bills of your company, you can receive up to 90% of the bill value to continue your
operations. Indifi gives you instant cash without any collateral requirements, and you have
the benefit of repaying when your client clears your bills.
Bank Overdraft/ Credit Lines:
For a small business in need of frequent cash flow, an overdraft facility also known as Line
of Credit helps in getting instant cash for paying vendors or extending credit to customers.
Except for retail companies, every other industry like manufacturing and hospitality can get
this business loan to meet urgent cash demands. With one-time approval, you can use the
loan for withdrawing funds for up to 12 months and only pay back the amount you use.
Merchant Cash Advance:
With a low-interest rate of 1.5% per month, you can get up to Rs. 1 Crores with a tenure of
12 months maximum. Small businesses looking to stock more inventory, expand their
customer base, or extend credit can get this business loan if a major number of
transactions occur using card swipes. This Unsecured business loan allows repayment
through daily deductions.
Retail Loan:
Retail loan is usually availed by individuals when they need credit to set up a business,
purchase assets (property, vehicles), emergency medical purposes, or travel. The
prerequisite is to have a good credit score since banks use it to ensure the individual’s
repayment ability. A good credit score with a great repayment history can help in availing
lower business loan interest rates and better credit terms overall.
E-commerce Business Loans:
With the advancement of new technologies, smartphones, and the Internet, almost every
business is moving online to set up its e-commerce website. The e-commerce sector is
booming in India as many direct-to-consumer (D2C) brands have emerged in the last five
years. The competition significantly increased which in turn requires online businesses to
constantly invest in marketing, promotions, inventory, logistics, etc., to gain customer
traction and keep up with the demand. E-commerce loan comes to the rescue and are one
of the simpler ways for e-commerce businesses to avail funds.
Trading Loans:
One of the crucial stakeholders in supply chain businesses is the trader that connects the
manufacturer and the consumer. Trading loans are provided by financial institutions to help
traders avail quick and easy funds required for their day to day operations. However the
majority of banks in India have stringent requirement and lengthy and slow processes. Any
individual or business involved in the sale and purchase of goods is eligible to apply for
business loan.
Business Loan Interest Rates & Fees
Customized Interest Rates Customized Interest Rates
Processing Fees 3%
Loan Tenure up to 3 years
Pre-closure Charges 4%
Eligibility Criteria > 5L Turnover in last
6 Months
Loan Amount ₹ 50,000 – ₹ 1 Crores
Installments Monthly
Features Of Business Loan From Indifi
Collateral Free
Indifi has an online process of loan application that guarantees minimum documentation
and quick disbursal of payment. We run the profile of our applicants through sophisticated
algorithms that nullify the need for collaterals. Therefore, you can get a business loan
without collateral to fulfil your immediate needs
Swift Disbursal
We follows a swift and hassle-free loan disbursal process. You apply for business loan and
get it processed within 48 to 72 hours for an amount up to INR 1 Crores.
Flexible Repayment Options
For small businesses seeking flexible repayment structures to meet their operational
requirements, Indifi has flexible repayment options at low-interest rates starting from 1.5%
per month. Companies also enjoy instant business loans by applying at Indifi.
Customized Loans
There is no one-size-fits-all model when it comes to business loans. Indifi has tailored
solutions with the help of multiple lenders to meet the dynamic funding requirements of
every company.
Low-Interest Rates
The business loan interest rate rolls-out at low , starting from 1.5% per month. However,
the borrower also needs to pay upto 3% processing fee.
Transparent Processing
From application to EMI repayment, you can apply for a business loan online at Indifi. Thus,
there is no scope for finding any hidden charges during the loan repayment.
How Business Loans Can Help MSMEs?
Here are some simple reasons which will help you make the decision faster:
Improved Cash Flow
Business Expansion
Loan for New Machinery/Equipment
Access to New Technology
Funds for seasonal and Specific Needs
Franchise Financing
Funding for Next Project Opportunity
Do’s and Don’ts of Small Business Loans
A small business loan can be an excellent source for raising capital, expanding the
company, or meeting the expenses. Still, it can also be a liability if you do not consider
specific points before applying for a business loan online.
Understand Your Business Requirements:
First of all, businesses need to understand their requirements of why they need a small
business loan, and how much they need. Borrowing too much will increase the EMIs and
will also be a liability on the business. In some instances, companies do not even need a
business loan, but they end up in debt. As business loan are not only how working capital
or asset requirements can be fulfilled, it can also be done through investment, increasing
production, or cost reduction methods.
Explore All The Options:
Usually, people have this misconception that banks are the only way business loan can be
sanctioned, but it is not the case. There are many alternatives available in the market
through which you can avail of business loan online or offline. Small business loan are
considered a better option. Thus, before making any decision, businesses should look out
for all the market options.
Be well-informed:
Today lenders offer both secured and unsecured loan. In the case of secured loan, lenders
ask for collateral, whereas, in unsecured loan, businesses do not need to pledge their
personal or business assets. Though the cost in case of an unsecured loan is higher than
secured, it is much faster and less risky.
Do not apply unnecessarily:
Before applying for a business loan, businesses should see that the loan must benefit their
business. They should think wisely and strategize with their business advisor before taking
a business loan to hamper the company’s growth.s
Plan in advance: Businesses should know beforehand where to put the loan amount
immediately after receiving it. Through this, the amount will be used where it is supposed
to be with minimum wastage.
Thus, keeping in mind the do’s and don’ts, businesses will be more careful, aware, and
prepared before applying for a business loan.
What documents For Business Loan will I require?
Here is the list of documents for business loan that you will require:
PAN card of the firm and promoters
Aadhaar card
Business registration proof
The submission of the latest ITR is compulsory if the business loan amount is exceeding 15
lacs.
Address proof of firm and all the promoters
Firm’s bank statement for the last six months
EMI Options To Repay Business Loan
Equated Monthly Instalment (EMI) are the monthly repayments that are made over a fixed
tenure to repay the loan amount with interest. Calculating emi made easy with loan EMI
calculator. Indifi, one of the most reputed financial institutions in India, offers two modes
of business loan repayment.
Flexi EMIs
Indifi has partnered with many lenders to deliver a transparent and flexible repayment
system. With Indifi’s Flexi EMIs, you can repay within 36 months as per your convenience.
Fixed EMIs
If you prefer the stability of fixed EMIs, Indifi business loans can be repaid with fixed
monthly instalments. This EMI is calculated by adding the principal loan amount and the
collective interest.
Who Can Take a Business Loan?
Business loans offer the financial stability of managing the everyday expenses of a
company. From budding entrepreneurs and small business owners to large Private LTD.
Companies, every eligible candidate can apply for a business loan in India from a bank or
financial institution like Indifi.
Here are the types of entities that are eligible for a business loan in India:
One person company
LLP
Private Limited company
Partnership
Proprietorship
The collateral-free loans allow access to unrestrained cash flow for small businesses. With
these funds, companies can leverage the following benefits:
How to Apply for Business Loan Online ?
The application process for a business loan is free from unwanted delays and unnecessary
paperwork across india. You can apply for a business loan online by fulfilling these
requirements for a business loan.
Submit Your Online Application
Fill in your basic and company details. Mention your fund requirements and prepare the
essential documents for submission.
Attach Your Documents
Upload the scanned copies of the documents needed for a business loan like business
registration proof, bank statement, PAN card, Aadhaar card, Company PAN card,
Partnership deed, Drug Licence, VAT Registration, and GST filing as applicable.
Wait for Approval
Once the correct documents and the filled application form is duly submitted, Indifi will
process your application and send the approval within 72 hours. After getting the instant
business loan approval, your loan amount will be disbursed immediately in your bank
account.
How to Improve the Chances of Getting a Business Loan?
With 50 active partners across 200 cities, Indifi has disbursed more than 35k loans to
deserving companies. Here are some tips to bag the best business loan in India or improve
the odds of getting your required business loan approved.
Cross-check the list of required documents and ensure that you upload the correct
documents. Your application could be rejected, or the approval process might be delayed if
the images are unclear.
Eliminate unnecessary business expenses (or overhead expenses) to get a stable cash
flow. When the debt service coverage ratio is balanced, lenders are more likely to approve
your loan application.
Small business loan helps businesses in catering to the funding requirements. They also
help small businesses grow and scale up their operations to meet the competitive market
demands. Keeping in mind the funding needs and budget, the borrowers must see what
type of small business loan is suitable for the business so that it does not become a liability
and hinder the performance.
The companies must understand what works for them and what not before making any
decision. They must analyze the market and explore all the options to apply business loan
online or offline. They must also plan their funding needs earlier with their financial
advisor’s help so that the loan amount is utilized correctly and the business gets the
maximum added advantage.
