A term loan is a popular type of business loan, available as either secured or unsecured. It comes in two forms: short-term loans with repayment periods of 1 to 5 years, and long-term loans with durations of 10 to 20 years.

Designed for new businesses, start-up loans help entrepreneurs get off the ground. If a borrower has a low credit score, lenders will review their personal credit profile. The business’s performance and turnover will also influence the loan’s terms.

These loans are used for daily operational needs such as increasing production, improving cash flow, and expanding the business. Typically short-term, with repayment periods of up to 12 months, working capital loans often have higher interest rates due to the lack of collateral.

A Letter of Credit is a commercial tool provided by lenders for international trade. It assures payment for importers and exporters, offering security to both parties involved in global transactions.

Tailored to support women entrepreneurs, these loans are designed to encourage female participation in business. Financial institutions offer special terms, and the Indian government promotes these loans to help women start and grow their businesses.

To successfully secure a business loan, applicants must meet the following criteria:

Applicants must be between 21 and 65 years old at the time of application and loan maturity.

Self-employed individuals, sole proprietors, private sector companies, and partnership firms involved in production or services are eligible.

The business should have a minimum turnover of ₹40 lakhs.

Applicants must have been involved in the current business for at least 3 years and possess a total of 5 years of experience in the industry.

The business should have been profitable for the past 2 years.

The annual income (as per Income Tax Returns) should be at least ₹1.5 lakhs.

to apply for a business loan, you will need the following documents:

• Photo ID Proof: Passport-sized photos, Aadhaar Card, PAN Card
• Address Proof: Ration Card, Voter ID Card, Driving License, Passport
• Income Proof: Salary slips, income tax returns, bank statements
• Bank Statements: Last six months of bank statements
• Age Proof: Passport, Aadhaar Card, or Voter ID Card
• Business Proof Documents: Trade License, Sole Proprietorship Declaration, Income Tax Returns for the last two years, Partnership Deed, Sales Tax Certificate, Profit and Loss Statement, and Balance Sheet for the last two years
• Other Documents: Sole-Proprietorship Declaration, Partnership Deed, certified copy of Articles of Association, Memorandum, and Board Resolution