Get the best rates for your business loans
What is a Business loan?
All business entities need funds to expand and develop their business idea.
To start, grow, expand and flourish.
To achieve this, smart business owners opt for business loans. Loans are generally availed for purposes like upfront capital investment, business expansion, and hiring staff, increase working capital, maintain inventory, purchase of machinery or plant, investment in infrastructure, servicing new orders, or optimizing cash flows, etc. But getting funds fast enough has become really difficult. Especially with the recent banking loan scams, NBFC crisis, and the resulting stricter norms. It is tougher to get loan sanctioned from traditional banks or non-banking financial companies (NBFCs). Therefore, FinBucket is your go-to provider of business loans in India. Specializing for SME and Small Business Sectors. Whether you are looking for Collateral-free Unsecured Loans or Short-term Working Capital Finance. You are on the right portal. We create flexible and short-term loan solutions for the specific needs of SMEs. In just a few clicks, your business gets the boost it needs to touch new heights. Get a competitive edge. Increase profitability.
- Get loan up to 10 Lakhs
- Interest rate starting from 0.99% per month
- Processing Fees 2% onwards
- Loan Tenure of 12-36 Months
Hurry up! Apply for easy loans through FinBucket today. We excel in business funding in a hassle-free manner.
Types of Business loan in India
Invoice Financing or Bill Discounting: Bill discounting is a financial instrument offered by banks/NBFCs/financial institutions for the seller of goods on credit. This provides instant cash-back on bulk or large purchases by getting the credit sales discounted. You shall have to submit important documents supporting the transaction. Such as transportation receipts, invoices, bill of lading, etc.
It is a good source of working capital finance. Bills that come under bill discounting are called “Bills of Exchange”.
Term Loan: Many types of term loans are available for businesses. They may be short-term loans, long-term loans, or other intermediate loans. You can avail of these loans according to your requirements and financial position. Generally, the tenure of a short term loan is 12 months. And for a long-term loan, it goes up to 3 years.
Term loans are divided into 2 parts. Unsecured Business Loans and Secured Business Loans. In Secured Loans, the collateral or security can be some property, machinery or business ground. They usually come with lower interest rates as compared to an unsecured one.
However, most of the business loans are unsecured loans. Not requiring any collateral or security to be submitted to the financial institution.
Collateral-Free or Unsecured Loan: Because no security is to be kept with the financial institution, therefore, these are also known as Unsecured Loans. The applicant must satisfy the eligibility requirements related to annual turnover to qualify for such loans.
Still, there may be some specific loans for which plant, machinery or raw material may need to be provided as collateral. The Applicant does not require to provide an asset, such as a car or house, to avail of a business/SME loan.
Line of Credit: It is a revolving credit, where the applicant can take an agreed amount as a credit. It is not provided in a single lump-sum payment. The borrower has to pay interest on the amount utilized, instead of the entire amount.
Line of Credit loan is not the same as most other term loans. Under this, you are approved for a certain capping limit of credit/ loan, for a certain duration. Post-approval, you can generally borrow as necessary, whenever you need it. And as much as you need. There is no need for you to withdraw and spend the money immediately after approval. As long as you have not borrowed the maximum limit, you can continue to borrow a little bit today, and more sometime later, as required. You are charged interest only on the amount you’re withdrawing. The monthly instalment won’t include any part of the principal. That principal amount of loan is to be repaid at the end of the tenure, as a lump-sum. And you always have the option of paying off the loan and start borrowing again.
Overdraft Loan: An overdraft loan means overdrawing money from the current/savings account. That is, the account holder withdraws more money than is there in the account. A pre-fixed rate of interest is charged if the overdrawn amount is within the limits of a preceding agreement.
Letter of Credit: It is a payment instrument used mainly in international trade in which bank provides a monetary guarantee to businesses involved in import or export of goods. These businesses have to deal with unknown suppliers. Therefore, they require assurance of payment before performing any transaction. Hence, a Letter of Credit is important to provide payment assurance to the suppliers or exporters.
The Letter of Credit can be used for both import and export of goods.
Loans for Self-employed Entrepreneurs & Professionals: Loans for self-employed entrepreneurs and professionals are taken in large numbers, making it the most popular category. The amount can range anywhere from Rs. 1,00,000, being the minimum. And can reach up to Rs. 10-20 lakh. The interest rate depends on the financial history of the borrower and is decided by the lenders as per their discretion.
Micro Units Development and Refinance Agency (MUDRA) Loan: This business loan was introduced by the Indian government. For supporting Small and Medium-Sized Enterprises (SME) and Micro, Small and Medium Enterprises (MSMEs) nationwide. These loans have special interest rates and are provided by almost every bank that offers business loans.
Under this scheme, loans from Rs. 50,000 to Rs. 10 lakh are provided to start an enterprise or an SME unit. Through this, the Government aims to ensure that proper funding is provided to first-time entrepreneurs or existing business owners to become self-reliant.
Flexible Repayment tenure: The borrowers can avail of flexible repayment tenure that goes up to 5 years. Therefore, these are more preferable than other loans. You also have an option of loan pre-payment. Here, you can foreclose the loan by paying some additional charges defined by the respective bank or NBFC or other financial institutions.
Working Capital Loan: Working Capital Loans help in overcoming the day-to-day financial requirements of an enterprise. The daily expenditure includes buying raw materials, paying rent & salaries, undertaking training, etc.
Stand-Up India: The Stand-Up India scheme was launched by the Government of India to provide funding to people under SC/ST category and women entrepreneurs. The primary purpose scheme is to make banks offer loans to at least one SC/ST borrower and at least one woman entrepreneur per bank branch. To enable them to set-up their own enterprise. The amount can range between Rs. 10 lakh and Rs. 1 crore.
Business Loan for Women: There are special schemes for women having exceptional entrepreneur skills. The female must own at least 50% of the company to become eligible for these loans. Such loans are usually provided at a discounted rate of interest.
Things to be considered while applying for a Business Loan
Loan Amount: A loan can be availed for up to Rs. 10 lakhs. It all depends on the needs of the business. It should be enough to meet your needs, as well as the relevant expenses. The loan amount that a financial institution would sanction depends mainly on the financial credibility of the applicant. All lenders check the eligibility of the applicant before lending the amount. Moreover, they would review the applicant’s credit history/score, business location, business existence, income details before sanctioning the loan.
Interest Rate: Like other Loans, you would need to choose between a Fixed and Variable Interest Rate. When considering your options, calculate how the different Rates will Impact the Repayments.
Otherwise, Interest Rates for Business Loans are mostly fixed. It means they will not change for the entire loan duration. The business loan interest rate offered, can go up to as high as 40%. Depending on the loan amount or requirements of the applicant. And depending on which lender the loan has been applied to.
FinBucket charges 15-30% interest rate.
Collateral: SME/Business Loans being unsecured loans do not require any collateral from the applicant. However, there are specific and very few loans in which plant, machinery or raw material need to be provided as collateral. Some lenders may ask for a personal guarantee. This kind of security allows the lender to seize any asset to repay the loan immediately if the terms of the loan are not met.
With FinBucket, you can avail of collateral-free loans for your business. This means you won’t have to put up your personal assets to qualify for funding. This is especially helpful when you are a small business owner or a start-up, without many assets to pledge.
Business Profits: Remember, your business turnover & profits will directly impact the size of your loan. All lenders like to ensure that the borrower is able enough to pay the loan back. With Interest. You will need to provide proof of how much money you expect to make. If you are starting up then a cash flow forecast, protection and indemnity insurance, and balance sheet forecast alongside a business plan will be essential. Established businesses need to provide 3 to 5- year trading history along with tax returns. With profit-making duration during the past 2 years, at least.
FinBucket gets you a loan with a turnover as low as Rs. 20 lakh. Whether profit has been earned or not.
Time for Processing: Because there is no security involved, there will be no time wasted for appraising the value of your property. This quickens the processing time of loans from FinBucket. Saving you from waiting anxiously till your loan is approved. You can move on to your Growth Plan Immediately.
Paperwork Involved: With FinBucket, you DO NOT need tons of paperwork. The process is completely online. All you are asked to submit are a few KYC details about yourself and your business. However, note that some financial institutions may require you to provide additional supporting documents.
Customer Support: Whether you need help in checking your eligibility, the maximum loan amount you can get, or any other assistance, the team of loan experts at FinBucket will help you every step of the way. You are also sent notifications of the status of your loan application via SMS and emails.
Categories of Loan Applicants
There are different types of people applying for business loans. Some are individuals who are self-employed or salaried. Whereas, others may be business entities and companies. The criteria for evaluating the applicants and gauging the viability of them repaying the loan will differ for each client.
Self-Employed Professionals (SEP) include Chartered Accountants, Allopathic Doctors, Company Secretaries, Architects, and Designers, etc. All those who are practicing some profession.
The other type is Self-Employed Non-Professionals (SENP). Such as traders and manufacturers. The eligibility criteria, documentation requirement, interest rate, loan tenure differ for this category.
Limited Liability Partnership, Partnerships Firms, Private Limited, and Closely-held Limited Companies have their own different categories. This includes even the banks and NBFCs who are looking for funds from other lenders.
Other constitution types depending on the business profile. Loan to them is considered on a case-to-case basis by the financial institutions.
Business Loan Eligibility criteria
Before applying for a Business loan, you should have:
Documents required for Business loan in India
Following are the documents required to process the loan:
– PAN Card – For Company/Firm/Individual
– Identity Proof (Any one out of the given)
- Aadhaar Card
- Voter’s ID Card
- PAN Card
- Driving License
– Address Proof (Any one out of the given)
- Aadhaar Card
- Voter’s ID Card
- Driving License
– Bank statement of the previous 6 months
-Latest ITR along with computation of income, Balance Sheet and Profit & Loss account for the previous 2 years, after being CA Certified/Audited
-Continuation Proof (ITR/Trade license/Establishment/Sales Tax Certificate)
-Other Mandatory Documents such as Sole Prop. Certified, Certified original true copy of Memorandum & Articles of Association (certified by Director) & Board resolution, Copy of Partnership Deed
How to get Business loan through Finbucket?
Following are the steps:
Register with FinBucket by Providing a Few Details. Such as your Name, Email-ID, Mobile Number, and Loan Amount you need, etc.
A detailed application form will appear. Fill it as required. Upload the required documents online. Like KYC, Account Details, Business Incorporation, and Income Related. Our experts will help you complete this step.
We will evaluate your completed Application Form and arrange approval from the lender. You will receive this within 48 Hours. Follow-Ups to get the loan sanctioned are responsibilities of FinBucket.
Amount gets credited to your registered bank account within 3-5 days. Directly.
Focus on Your Business Growth. Concentrate on fulfilling all your dreams & ambitions. Take your business to the next level.
Factors deciding the interest rates of Business loans
Financing comes at a cost. This cost or expenses determine whether the loan would be cost-effective or not. These business loan interest rates differ from one lender to another. So you must check online sites to get the best deal. While business loan interest rates are affected to some extent by external forces like inflation, monetary policy, the repo rate, and other economic conditions. There are certain factors within your control.
Benefits of Taking Business Loan with FinBucket
The reasons to choose FinBucket over other moneylenders are:
- Collateral Free Loan,
- Reasonable Rate of Interest,
- No Extra Payment,
- Completely Online Process,
- Automatic Deduction,
- Get Loan even if Residence + Business Premises are Rented,
- Loans for Home-based Businesses,
- Lowest CIBIL Requirement
Our loan processes are extremely clear, efficient, completely online and easy to understand. You can check your loan eligibility, apply for a loan, and get the money credited to your account without needing to visit us!
How to Improve Eligibility
Like for any other loan, a business loan provider also analyses the business’s creditworthiness by checking the repayment capability, financial history, business records, and stability.
If you are applying for a business loan then you must focus on the ideas and presentation. The below checklist will help you in acquiring the necessary funding for your business.
- A well-written business plan to be submitted to the lender.
- Keep a decent credit/CIBIL score. Ranging between 700-900 points.
- Ensure that you satisfy the eligibility criteria.
- Have all the required documents ready.
- Repay your present debts, if any, at the earliest.
- Do not keep existing loans outstanding.
- Have some funds ready, in case the lender needs you to put something forward in advance.
- Because you are applying for a business loan, you should maintain an inclusive database of the company’s financial situation and past performance along with its cash flow statement.
- Do not default on payments.
- Make timely payments. Of loans, credit cards and/or other debts.
- Have enough balance in the bank account for the ECS transactions.
Remember, late payment and defaulting are the core reasons for bad credit scores.
Repeated rejection of the credit cards will lead to a drop in the credit rating score too.
Look for a financial institution that offers fast servicing with less interest rate. A transparent lender will be more flexible in its eligibility criteria.
If you are in business, you may require a business/SME loan, sometime in the future. Keep a check on your transactions and credit score from today itself. Financial Institutions consider past transactions to decide your ability to repay the loan in the future.
Frequently Asked Questions
As soon as you upload your documents. And your documents are verified, You will get intimated of approval within 48 hours.
Once you have been pre-approved for loan, the amount gets transferred to your bank account within 3-4 days.
FinBucket facilitates loans with a tenure of 12 months up to 36 months.
The Maximum Age condition is that the applicant should not have touched 66 at the end of loan duration. For example, if your loan is ending in September 2022, your age, if you apply in October 2019, should not be more than 62 years.
1. You must be a resident of India.
2. You must be a self-employed individual between the ages of 23 to less than 63 years.
3. Your business must be existing for 2 years.
(a)Completed loan application form
(b)1 – passport size photograph
(c)Valid Proof of Applicant’s Identity (any of Passport, PAN card, Voter ID, Driving license)
(d)Residence Proof (any of Ration card, Telephone, Electricity Bill, Lease agreement, Trade license, Passport, Sales Tax certificate)
(e)Proof of Age (any of Passport, PAN card, Voter identity card)
(c)Address Proof of Self and Firm
(d)Business Registration and Vintage Proof
(e)Bank Statement of the last 6 months.
The amount of your EMI depends on the loan. Please use our EMI Calculator to know exactly how much you would need to pay.
(a)The credit score of the business and/or the partner/director/proprietor. Having a good credit score is necessary but not the only criteria. If the credit score is a borderline case, the lender may limit the loan amount.
(b)Financials for the last 2-years. Elements like turnover, partner/director salary, depreciation, interest cost, net profit after tax, etc. are some of the key factors that go into deciding the loan amount.
(c)Ability to repay the EMI, on time, for the current loan be requested as depicted by the Debt service coverage ratio (DSCR).
Customer can also avail an overdraft facility in which he/she will only have to pay the interest on the drawn amount.
P is the principal or the loan amount
r is the rate of interest levied on the loan amount (the interest rate is to be a monthly rate)
n is the total number of monthly installments
For example, Company ABC has taken a loan of Rs. 10 lakh for 2 years at an interest of 12 % p.a.
First, convert the annual interest rate into a monthly rate (for r) and the tenure into months (for n).
r= 12/12 = 1% per month
EMI = [P x r x (1+r)^n]/[(1+r)^n-1] EMI= [10,00,000 x 1/100 x (1+1/100) ^ 24 / [(1+1/100) ^ 24 – 1)
EMI= Rs. 47,073
This is the same formula an EMI calculator uses to provide you with the correct EMI payable within a few moments.div>
The Top-up loan has a lower interest rate & lower processing fee compared to other loans.
To apply for the top-up loan, simply call us at + 91 875 000 8881 or email us at [email protected]
Regarding the status of your loan application. We’ll keep you updated via an e-mail and SMS as soon as it is approved. Or you can:
(a)Check on our web portal.
(b)Call at the customer care + 91 875 000 8881.
(c)Or you can mail us at [email protected]
With FinBucket, you can take the option of Line of Credit and Overdraft Facility.
Other than that, Huge purchases and outstanding debts impact the loan approval. So you should try to avoid the same. The rate of interest will get higher due to a low credit rating.
FinBucket will never ask you to make a payment anywhere outside the secure FinBucket website. DO NOT make payment to any other bank account, UPI or wallet or disclose your bank/card information to fraudsters and imposters claiming to be working on our behalf.
Some of our Awesome Testimonials
“I had to just fill 1-one at FinBucket. They automatically searched across 50+ partner banks and NBFCs and gave the best deal to me.”
Nitin Bhatia, COO,
CaterWow Private. Limited
“I had taken loan for the first time online. Instant assistance and patience from team FinBucket helped me apply and get loan easily.”
Founder, Shiksha Learning Academy
“I am very satisfied with the services and business relation with FinBucket. It was easy and simple to get any information regarding loan from them.”