Startups, small businesses, and enterprises with growth aspirations all have one thing in common. They need monetary funds to fuel their business goals. Whether your business needs to expand, innovate, or outpace the competition, an infusion of funds is crucial. To achieve their goals, businesses can raise capital from the public or from interested investors. An alternative way to finance their growth is to opt for business loans instead.
Business loans are available for enterprises and ventures of all sizes. They help companies meet different financial goals — from expansion and growth to product development and innovation. With RBI-approved non-banking financial companies like Lendingkart now available in India, it has become easier for businesses of all sizes to access financing solutions effortlessly.
In this article, we delve into how you can obtain a business loan from Lendingkart quickly.
What is a Business Loan?
A business loan is a type of external financing that helps businesses and commercial entities meet their financial requirements. The amount borrowed by an entity must be repaid over a predetermined period. The lender levies additional interest on the principal borrowed. Business loan interest rates are determined according to various factors like the vintage of a business, its profitability and revenue and its credit score.
Depending on the nature, structure, and terms of the financing agreement, business loans can be any one of the following types:
- Term Loans: Term loans are one of the most common types of financing available for enterprises. These are secured or unsecured business loans that need to be repaid over a predetermined term. The business loan interest rates are also specified at the time of availing the loan.
- Working Capital Loan: A working capital loan is a type of unsecured business loan that helps fund the day-to-day expenses and activities of an entity. These loans have shorter repayment cycles and are available for businesses that need financing without the added burden of collateral.
- Business Loan Against Property (LAP): This type of loan is secured against a residential or commercial property, which is used as collateral for the financing. Since the funding is secured, the business loan interest rate is typically lower when compared with unsecured term loans.
- Overdraft (OD) Facility: This is a short-term financing option for businesses. Here, a business can withdraw funds in excess of its account balance, up to a specified limit. Interest is charged on the amount of credit utilised. The credit limit depends on the business and collateral offered, if any.
- Cash Credit: This is also a type of short-term credit facility that is offered to businesses. The entity availing of this option can borrow funds up to a predetermined credit limit. The lender may require collateral in addition to other basic financial and credit-related details.
- Letter of Credit (LC): This is a type of credit facility commonly used by businesses engaged in international trade. Here, the entity’s bank issues a letter to the company’s suppliers, guaranteeing timely payment. The end goal of this arrangement is
- Equipment Financing: This type of business loan is offered exclusively for the purpose of purchasing new machinery or upgrading existing equipment. It is particularly useful for entities in the manufacturing sector and other equipment-heavy industries.
The Key Advantages of Business Loans
Opting for business loans can be beneficial to business entities in many ways. Here are the top advantages of choosing this method of financing.
● Versatile Credit Options
Given the different types of business loans available today, companies, MSMEs and other entities can choose from a wide range of credit options. Whether they need short-term financing or long-term funding, and whether they require secured or unsecured business loans, there is a solution for all kinds of business financing needs.
● Flexible Financing
The terms of repayment are flexible and differ from one type of business loan to another. Business loan interest rates are tied to various factors — which include both loan-related and business-related parameters. Similarly, the tenure and other terms can also be negotiated with your lender, depending on the relationship you share with them.
● Quick Availability of Funds
Raising capital in the equity market may be more time-consuming for businesses. However, with the evolution of financial technology in India, it is possible to obtain business loans almost instantly today. Platforms like Lendingkart further amplify this benefit for businesses and make financing accessible to new and emerging enterprises too.
● Retention of Profits
In equity financing, businesses are required to share their profits with investors. However, by opting for business loans, it is possible to enjoy the advantage of profit retention. This is because business loans are classified as debts in the company’s books of accounts. So, while it is necessary to pay interest on the amount borrowed, the company can retain full ownership and authority over its profits.
Lendingkart’s Business Loan Eligibility Criteria
Now that you know what business loans are and why they can be beneficial, let’s discuss which businesses are eligible to obtain this kind of financing. If you opt to secure a business loan from Lengingkart’s platform, you need to meet the following business loan eligibility criteria:
● General Criteria for Applicants:
- Aged between 18 and 65 years
- Cash profits over the past two years
- Financial statements audited by a registered chartered accountant
● Criteria for Self-Employed Professionals:
- Proof of the required qualifications (for professionals like consultants, engineers, doctors, and chartered accountants)
● Criteria for Proprietorships and Limited Liability Partnerships (LLPs):
- Financial statements for the required period
● Criteria for Companies:
- For loans up to ₹15 lakhs, a net annual income greater than ₹1.5 lakhs
- For loans over ₹15 lakhs, a net annual income greater than ₹3 lakhs
How to Get a Business Loan in India With Lendingkart?
Getting a business loan from Lendingkart is significantly easy, thanks to the digital business loan processes involved. Here’s a step-by-step guide to help you apply for a business loan with Lendingkart easily.
● Step 1: Check Your Eligibility
Begin by checking if you qualify for a loan as per Lendingkart’s business loan eligibility criteria. You can complete this process within just two minutes. It is crucial to check this because if you are not eligible, you cannot apply for a loan online.
● Step 2: Submit the Documents Required
If you are eligible, you need to fill out and submit your loan application online. You must also submit the documents required, like your PAN, Aadhaar card, bank statement and proof of registration, among others.
● Step 3: Receive a Loan Offer
Once you submit your application, Lendingkart will evaluate your eligibility and determine the amount of loan you qualify for. You will then receive an offer for a loan based on factors like your business income, profitability, cash flow, credit score and such.
● Step 4: Sign the Loan Agreement
You can assess your loan offer and determine if the amount offered meets your requirements. You can also evaluate the terms and conditions of the loan. If you find that the offer aligns with your needs, you can sign the loan agreement and complete the KYC (Know Your Customer) process.
Reasons to Choose Lendingkart as Your Financial Partner
There are various reasons to opt for Lendingkart if you want to apply for business loans today. Here are the key advantages of choosing Lendingkart:
● Quick Processing
Your loan application with Lendingkart is processed quickly, so you do not have to delay your business operations as you wait for financing. Most applications are processed within 72 hours.
● Convenient Application
The business loan process is also extremely convenient. You can apply for and obtain commercial business loans from the comfort of your home or workspace since the process is entirely online.
● Fair and Transparent
Lendingkart also offers fair and transparent terms for business loans. So, it is easier to compare your offers and make the right choice. You also do not have to worry about any hidden costs or charges.
● Easy, Unsecured Borrowings
Businesses can also opt for easy, collateral-free borrowings with Lendingkart. This means there is no risk of potentially losing any valuable asset that may be used to secure a loan. Such unsecured business loans can be more convenient for companies and other entities.
Factors to Consider Before Applying for a Business Loan With Lendingkart
A business loan from Lendingkart can be beneficial to companies and other enterprises in several ways. However, to make a smart decision about the type of credit facility to opt for and to assess the terms and conditions attached, you need to consider the following factors:
● The Purpose of the Loan
Consider your reasons for obtaining the loan, because this factor directly influences the type of loan you need to opt for. For instance, if you want to purchase new machinery for your production line, equipment financing would be the right fit. Alternatively, if you need funds to meet your daily operational expenses, a working capital loan may be the right choice.
● The Collateral Requirements
Not all business loans require collateral. If you opt for an unsecured business loan, you need not worry about this aspect. However, if you apply for a secured credit facility, you need to assess the collateral required and evaluate whether you can afford to offer the required assets as collateral to secure the loan. This is crucial because, in the event of any default, the lender can take possession of the asset.
● The Interest Rates
Business loan interest rates vary from one lender to another. They also depend on the nature of the business, the credit history of the applying entity, the collateral offered, if any, and the prevailing repo rates. To ensure that you get the best offer available to you, it is crucial to compare different loan offers and see how the interest rates stack up against one another.
● The Repayment Terms
In addition to the interest rates, you also need to factor in the terms of repayment. They include the nature of interest rates (whether fixed or flexible), the repayment tenure, the credit limit offered (for cash credits and overdraft facilities) and other costs like processing charges. This will give you a clear idea of the big picture and help you assess if the msme loan offer is beneficial for your business.
● The Lender’s Reputation
You should also look into the lender’s history and reputation. You can check out customer reviews and get a better idea of the lender’s customer-facing processes. Ideally, you must look for a lender who offers smooth application procedures, quick loan evaluation and prompt disbursal. It also helps if they have a reliable customer support team to help lenders with their queries or complaints.
Conclusion
The bottom line is this — obtaining a business loan with Lendingkart is quick, easy and efficient for businesses of all sizes and in all industries. The business loan processes are digital and seamless, the charges and terms are transparent, and businesses can always rely on trustworthy support. So, if you want to scale up your business and tap into potential opportunities for growth, all you need to do is check your eligibility and submit your application for a business loan today.
