Having a full-time boss is better than working under others. However, starting a business is more challenging than you think; you will need proper knowledge of the business and market you want to approach. You can learn how to start a business and develop a detailed business plan, but implementing your plan takes time and effort. You will need a significant sum to start a small to medium-sized business.
Fortunately, a small business loan enables people to meet their financial needs to start a business. You can also get this loan to raise funds and create your dream profession. Here, you can learn the necessary information about how to get a small business loan and more.
Which banks offer small business loans in Coimbatore?
Many banks and finance agencies offer small business loans based on the applicant’s eligibility and requirement. Generally, financial institutes provide 2 types of small business loans, including secured and unsecured business loans in Coimbatore. Secured business loans require collateral in exchange for loan money, while unsecured loans don’t require any collateral. You can apply for any of them as per your choice and convenience.
Different banks charge different rates of interest and provide different repayment tenure. You can compare the rate of interest of business loan providers by multiple banks online. It would help to look for other charges, such as processing fees, before applying for a loan. Comparing the business loan lets, you choose the best business loan that fits your monthly budget.
What is the eligibility requirement for a small business loan?
Most banks and finance bodies have eligibility criteria to avail of an unsecured business loans in Coimbatore. The minimum requirement for this loan includes the following:
- The applicant’s age must be above 22 years old, and the maximum age of the applicant must be at most 65 years.
- The applicant must propose a business plan application to the lender before applying for the loan.
- The applicant must be an Indian citizen.
- The applicant should provide proof of business turnover; IT returns for the last 2 to 3 years.
- The applicant must be self-employed with at least 3 years of business experience.
You will need these documents for your business loan application, including proof of address, identity, business, business income tax certificate, partnership deed, bank statements of 6 months, and sole proprietary deed.
Features for a small business loan
Here’s a list of features of a small business loan:
Affordable interest rates
Many things, such as tenure, loan amount, and credentials of the applicant, affect the interest rate of a business loans. However, most banks and NBFCs offer this business loan at a low-interest rate to help people repay their debts on time.
Quick fund disbursal
When a business owner applies for a business loan to fulfill a specific need to expand their businesss, the lender will approve the loan and send the loans amount to their account. You can also apply for this loan and get it approved within a day.
This loan requires minimal documentation, which makes the loan process easy and fast. You can check the interest rate, tenure, and loans amount for an unsecured business loans in Coimbatore and calculate your EMI online to avoid rejection.
No collateral required
This loan doesn’t require collateral or assets in exchange. You can easily get a loan if you have no valuable assets. However, you will need a good credit score to obtain this loan.
What disqualifies a person from getting a small business loans?
Many factors can result in loan rejection. Here is the most common mistake people make when they apply for a business loans and face rejection:
Many business owners often need to provide more accurate documents at the time of loans application. You should update all your documents before you apply for a loan.
Inefficient business plan
If a lender finds something faulty in your business proposal, they will reject your application at once. Lenders don’t provide loans for illegal business ideas or do not show any profit in the future. You should create a flawless business plan to avoid loans rejection.
Poor credit score
A good credit score is essential for applying for an unsecured loan. If your credit history shows that you failed to repay your debt in the past, the lender will avoid providing you with a loan. You can boost your credit score by regularly paying your credit card bills and other loans.
If you are eligible for a small business loans but have enough savings to start your business, you should still apply. A business loans comes with many benefits, such as saving you from spending all your savings at once and helping you maintain a good credit score, which enables you to purchase a loan for other purposes.