Now taking a loan for business has become easy. Many banking firms are providing such loans. Also, banks have now the Business Startup Loan process also made very easy. To promote small enterprises (MSMEs) in the country and the government has started various loan schemes.
Apart from the Prime Minister’s Mudra Yojana, many other schemes take a small amount to a big loan.
What is Business Startup Loan?
That is a loan taken to meet your business needs. If you also want to take a business startup loan from any bank, then know. What is its process?
- Create a detailed business plan.
- Choose the bank from which you want to take a loan. Provide a business plan.
- After that, decide how much loan you need.
- Find out about your credit score. Banks decide to give you a loan only after looking at your business plan. If the bank thinks that your business and the profits from it will help you repay the loan in the stipulated period, the bank approves your loan.
Benefits of taking a Business Startup Loan
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Increases cash flow
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Money helps with business needs.
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The need for funds fulfils for both the short and long term.
Who can apply for Business Startup Loan?
- Sole Proprietor
- Businessman or entrepreneur
- Private Limited Company Registration Online.
- Partnership firm
- If you are already running a business and facing the problem of money to expand it. To fulfil its related needs, you can also take a business loan.
Documents for Business Startup Loan
- PAN Card is one of the most important documents for a business loan.
- Income Tax Return: Usually income tax return of 2-3 years will be required. It acts as your income proof for a business loan.
- Aadhar Card / Proof of Residence: Proof of residence is a must for a business loan.
- Business Address Proof: It is necessary to provide proof of business address in the documents required for a business loan.
- Bank Statement: How much you spend, how much you borrow, and when you repay the loan. All these transactions are reflected in your bank statement with a good credit balance. The lender can understand whether you are reliable enough to repay the loan.
Types of Business Loans
- One is a short-term working capital loan or line of credit:
Used to pay wages or other expenses needed to maintain the company’s daily operating capital. The loan may not require any collateral and has an initial interest-free period.
- The other is equipment financing loans:
It is a long-term loan and requires business as collateral. Moreover, it is used to purchase heavy or expensive machinery.
FAQs
What types of business can I start with these loans?
You can start any type of business which is legally authorized by govt. with these loans and also according to the budget that you are putting in the business
For example – you can get full details on how to start a shoe business and get your business to a new level.
Conclusion
I hope I have given enough knowledge on business startup loans and it is helpful for you. It is advisable to consult an expert before starting a business.
Therefore, when you go for registration of your business, clear all the things with your consultant and ask them for advice on loans. They can guide you for the investors, how to find them and how to get the loans.
Also, an expert can help you with guidance on your business activities and how to earn profits and marketing.
