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About Business Loan

As the name suggests it a type of loan which is mainly given to borrower for doing business, doing any business initially requires a lot of money, doing business is the prime motive of this loan. Influx of money is required to scale up a business, so financial institution and banks provide such loans to a business entity which has to be pay back to the lender with some percentage added as an interest on the principle amount. Business loan always given to a company not to an individual as in the case of a personal loan some of the important purposes of business loans are listed below

Purpose of Business Loan

  • For office space extension

  • At the start of the new business not many people enjoys a big office space as the fund for starting business doesn’t allow to rent a big commercial premises you might be landing up doing business in small area it may be only in one room, but as you grow in your business you require to expand your office area as you might be hiring new employee. However in doing so it might require a lots of money, by taking business loan you can expand your office area.

  • For purchasing new equipment

  • As your business grow bigger and bigger day by day there are lots of thing which requires to be changed by not doing so you end up losing your business growth, but if money is coming in between your business growth and you then there is always an option to go for a business loan and enjoy your success.

  • For Inventory purchase

  • Purchasing inventory always require huge amount and it is one of largest expenditure of business, As your business will grow day by day then it may become a necessity to acquire and stock inventory in large number. If you are unable to do so you might end up losing un-necessary business loss. Business loan is always a good option for meeting those expenses.

  • Funds for new opportunity

  • There are not many times when you come across with new business opportunity which you do not want to miss at any cost, but due to lack of fund you stop yourself going for those golden business opportunities. You need not to constrain yourself in achieving your dream business loan is always a fruitful option.

Eligibility and Benefits

  • Relevant Business experience: - This is very important factor in getting a business loan if your business is doing well from past 3-4 years and shows stable growth then the chances for approval of loan will be higher on the side. Almost all the bank prefers stable business as well sustainable growth.

  • Age of the owner: - Every bank prefers to approve loan those who are of age between 28 years to 65 years.

  • Age of business: - Preferable age of business for bank to approve Business loan is somewhere between 3 to 5 years

  • Time Period of loan: - It should as minimum for 1 year and maximum for 5 years

Required documents

  1. Complete Loan Application Form

  2. One Photograph of each applicant duly pasted and signed across on application form

  3. Photo Identity Proof (Any One) :-

  4. PAN Card, Passport, Driving License, and Voter’s ID card
  5. Residence Address Proof (Any One) :-

  6. Any utility bill (electricity/telephone/gas), Passport, Driving License, Voter’s ID Card, Ration Card, Leave & License Agreement
  7. For Salaried Individuals :-

    • Form 16 for Last 3 years / Annual Salary Certificate and Income Tax Return Ack.
    • Latest 6 months Salary slip
    • Bank statement/passbook copy with cover page for last 6 months
    • Employer’s ID Card copy
    • Appointment Letter / Increment Letter from the employer and also copy of previous employment letters if current employment is less than 2 years
  8. For Self Employed Business and Professionals :-

    • Last 3 years Income Tax Return Ack and complete set of financials, Audit Report, Tax payment challahs / TDS certificates
    • Last 12 months bank statements / Passbook copy with cover page of all bank a/c’s
    • In case of Company, Memorandum & Articles of Association, List of Directors and Shareholding Pattern on Company Letterhead, Latest Annual Return filed with ROC
    • In case of Partnership Firm, copy of partnership Deed
    • Company Business Profile
    • Office Address Proof (Any One) - Any utility bill (electricity/telephone), Shop & Establishment License, Leave & License Agreement, VAT / Service Tax Registration certificate
  9. Details of Existing Loans and Sanction Letters & Repayment statement of these Loans

  10. Credit Card details & latest credit card statement

  11. If Rental income is to be considered, copy of Rent Agreements

  12. Processing Fees chq

  13. Property Papers :-

    • Latest Agreement for Sale along with the previous chain / link agreements starting from 1st purchaser from builder to till date
    • Society Share Certificate (front & back side)
    • Latest Society Maintenance bill
    • Building sanction plan (Approved Plans) or Occupation Certificate

Additional documents required in case of Balance Transfer (BT) or Seller BT case:-

  • Foreclosure quotation / letter from the bank
  • Letter from the bank / financial institute stating list of documents held by them

NOTE : All documents need to be self attested by the respective applicants. For self employed, all income documents need to be certified by CA.

Tax Benefits

There are several tax benefits enjoyed by the business owner when they opt for a business loan. The loan amount can be used for different purposes like working capital or for buying equipment and inventories. As in business loan the borrower enjoys the flexibility in loan repayment.

Banks providing Business Loans

In India Almost all the major banks dealing in business loans, some of the major bank those who are dealing with it are listed below





  • YES Bank

  • State Bank of India

  • Bank of Baroda

  • Standard Chartered Bank

  • India Bulls Finance

  • Aditya Birla

  • DBS

  • Kotak Bank

  • Edelwise

  • DHFL

  • PNB Hosing Finance

  • Tata Housing