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Are you eligible for a Business Loan?

 

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Have you applied for a loan? Be it a secured or an unsecured one? If you have then you will definitely know the process as well as the eligibility criteria for one. Every loan has its own set of criteria and unless you meet all them, you won’t be able to avail a loan.

Now, if you have applied for a loan before, you must be aware that any lender verifies the information furnished by an applicant for any type of loan. This is not just the case for personal loans.

So is the case with business loans. Lenders like Tata Capital extend business loans to borrowers based on the performance of the business over a period of time and the credentials of the owners in the industry and market. They also evaluate the future business prospects to make sure that the business can take care of repayment of the business loan along with the interest thereon.

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To make it simple for business loan applicants to understand the application process, lenders such as Tata Capital prescribe the eligibility conditions to apply for business loans. If you read the conditions you will come to know whether you are eligible for the business loan and if so, how many loans they would extend to you. In fact, they give you tools such as business loan EMI calculator that you can use to evaluate and calculate for yourself the loan amount, tenure and EMI option.

You can go through the eligibility conditions for a business loan detailed below prescribed by lenders and ascertain if you are eligible or not.

Personal Credentials

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You need to be between 25 and 65 years of age to apply for a business loan. You need to be the owner or part owner of the business.

Business Credentials

You need to run a business that produces goods and extends services. You have to be a registered business owner with the necessary permissions and licenses to run the business. You could be a small scale unit producing goods such as textiles, candles, baskets, cloth bags or any other product. You could also run the business of services such as DTP.

You can also be professional offering professional services to various clients with the appropriate approvals from statutory authorities. You could be chartered account, business consultant or marketing professional.

Turnover

The minimum turnover needs to be Rs 40 lakh per year. The business turnover needs to show an increase year on year.

Business continuity

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Your business needs to be in existence for at least 5 years with all the necessary approvals for running the business.

Profitable

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Your business needs to be running profitably and it must have made profits in the last 3 consecutive years. The minimum profit needs to be Rs 3 lakh every year.

Financial statements

Your financial statements must conform to statutory regulations and be audited by a registered chartered accountant.

Loan Basis

You will be eligible for business loans only on the existing business and its performance characteristics.

Loan limit

Your business loan cannot exceed Rs 50 lakh.

Business Credit Score

You will need a business credit score while applying for a business loan. This credit report gives the lenders like Tata Capital a good idea if the business will be able to repay the loan on time or not.

Availing a business loan is rather simple if your business is profitable and running efficiently with a sound standing in the industry. You can browse the website of the lender to understand the eligibility conditions and the terms and conditions under which lenders such as Tata Capital extend business loans. You can also evaluate your requirements by using the various calculators available on the website including the business loan EMI calculator and after making a considered decision you can apply for the business loan.