Funds are the first requirement for creating a business. In almost all cases, the business owner and partners always bring the initial fund to start a business. But as the business grows, additional funds are a must to grow the business. For example, it may require additional funding to purchase a new machine, hire a servant, run an operation, make inventory, or repair equipment. In any case, you need to find a business loan provider for the necessary funds. However, you may also need to meet the business loan provider's business standards.
The business loan eligibility criteria usually depend on the type of business, income, business health, profit loss balance sheet, director or partner's CIBIL score, age limit, and more.
Step 1: Check your Loan Eligibility
Step 2: Apply Online with the correct Documents
Step 3: Sign the Agreement after tenure and interest are agreed upon
Step 4: Receive loan amount in as less as 2 Days
Step 5: Start operating business with ease
When you are ready to acquire a loan for the business with the required documents, the bank acts by interviewing the borrower. The lender wants to know some information related to the business. Some possible questions are as follows:
Business Loan EMI is calculated from the below-mentioned formula:
E = P x r x (1+r)n / (1+r) n-1
E = EMI amount for Repay Loan
P = Principal amount
r = Rate of interest
n = Tenure of Loan
Business loan amount = ₹ 5 lakh
Interest rate = 20%
Tenure = 3 years
As per the formula, the loan interest rate per month will be 20/12 = 1.66%
Total tenure in months = 3 x 12 = 36 months
EMI= [5,00,000 x 1.66/100 x (1+1.66/100) ^ 36 / [(1+1.66/100) ^ 36 – 1)
You will get your EMI = Rs. 18,582/-
This method is not only time-consuming but also subject to human error. As a reason, it is safer to utilize an online EMI calculator, which is conveniently accessible via the internet.
Loan eligibility or repayment capacity is mainly based on the individual's total profit and current loan EMI.
Many other factors determine loan eligibility, such as age, financial status, other income, credit history, credit score, other financial obligations, and loans.
Eligibility for business loans can be increased by: