Securing quick business finance can help entrepreneurs strengthen their business operations in more ways than one.
Whether you are a well-established business owner seeking expansion or a small business owner ready to launch a new product, accessing a loan of 10 lakhs can provide the necessary financial support.
However, navigating the loan application process can be challenging without the proper knowledge and strategy. This article will help you get a 10 lakh Business Loan in India by discussing the required steps and essential factors.
Let's explore how to get a 10 lakh Business Loan and the path to financial growth.
How to Get a 10 lakh Business Loan?
Getting a 10-lakh Business Loan in India is easy. But many applicants face challenges due to missing essential elements such as proper documentation and a poor credit score. However, to get easy loans, there are other steps to follow.
Here are some steps on how to get a 10-lakh Business Loan:
- Check your eligibility criteria.
- Maintain a good credit score and financial history.
- Research and identify a reliable lender like Hero FinCorp.
- Gather necessary documents and paperwork.
- Prepare a comprehensive business plan.
- Apply on the lending institution’s website.
- Provide KYC details and required documents.
- Once verified and approved, get the loan offer.
- Accept the loan offer to get quick disbursal.
Benefits of Rs 10 Lakh Business Loans
Here are some key benefits of availing Rs 10 lakh Business Loan in India:
Expansion opportunities: With a 10 lakh Business Loan, you can invest in expanding your business operations, such as opening new branches, upgrading equipment, or increasing production capacity.
Working capital management: The loan can provide the necessary funds to manage day-to-day operations, purchase inventory, pay salaries, and cover other operational expenses, ensuring smooth business continuity.
Also, Read: How to Get Rs 5 Lakhs Business Loan Instantly?
Marketing and advertising: Access to additional capital allows you to implement effective marketing strategies, boost brand awareness, and reach a broader customer base, ultimately driving sales and revenue growth.
Flexibility in decision-making: Having a substantial loan amount at your disposal gives you the flexibility to make crucial business decisions without being restricted by limited resources.
Financial stability and cash flow management: The loan can help stabilise your business's financial position, improve cash flow management, and provide a buffer during challenging times, ensuring sustainability and resilience.
Note: Before borrowing, carefully examine your business's financial needs and repayment ability.
10 Lakh Business Loan Eligibility
To be eligible for a Business Loan of up to 10 lakh in India, there are specific criteria that lenders typically consider. These eligibility factors can vary depending on the lender and their policies.
Here are some common factors:
Age and Citizenship: You should be an Indian citizen aged 25 years or above. The maximum age limit for loan applicants is 65 years.
Business Vintage: Your business should have a minimum operational history, usually 3-5 years.
Annual Turnover: Your business must have a decent annual turnover, which may vary by lender.
Creditworthiness: Lenders evaluate your creditworthiness based on your credit score, history, and repayment record. A good credit score enhances your chances of loan approval.
Financial Stability: Lenders may evaluate your business's financial stability by examining profitability, cash flow, and debt-to-income ratio.
Collateral or Guarantees: Some lenders may require collateral or personal guarantees to approve the loan. We at Hero FinCorp provide unsecured Business Loans of up to Rs 40 lakhs without collateral.
Documentation: You must submit relevant documents such as business registration proof, financial statements, income tax returns, bank statements, and identity/address proofs.
Remember, these eligibility criteria are general guidelines, and lenders may have additional requirements. It's crucial to check with specific lenders offering Business Loans up to 10 lakh to understand their precise eligibility criteria and documentation requirements.
Points to Note Before Applying for a Business Loan of Rs 10 lakh
Before Applying for a Business Loan of Rs 10 Lakh, It Is Crucial to Consider the Following Essential Points
Loan Purpose and Repayment Plan: Determine the specific purpose for which you need the 10-lakh loan for business. Additionally, develop a well-thought-out repayment plan to ensure timely repayments.
Eligibility Criteria: Understand the eligibility criteria set by lenders offering 10 lakh loans for business. Factors such as business vintage, turnover, creditworthiness, and documentation requirements may vary among lenders.
Also, Check: Top Government Business Loan Schemes in India
Interest Rates and Charges: Compare interest rates, processing fees, and other charges associated with the loan. Choose a lending institution like Hero FinCorp, well-known for offering competitive rates and reasonable fees to minimise borrowing costs.
Collateral or Guarantees: Assess whether the lender requires collateral or personal guarantees to secure the loan. We do not require collateral to provide Business Loans to eligible applicants.
Loan Tenure and EMI Affordability: Consider the loan tenure that suits your business's cash flow and financial stability. Calculate the Equated Monthly instalments (EMIs) based on different terms to ensure they are affordable within your budget. We offer repayment tenures of up to 60 months.
EMI for Business Loan of Rs 10 lakh for Tenures
The EMI (Equated Monthly Instalment) for a Business Loan of Rs 10 lakh can vary based on the loan tenure and interest rate the lender offers. The longer the tenure, the lesser the EMI amount, while the shorter the tenure, the higher the monthly instalment. Entrepreneurs can choose a loan term as per their repayment capacity. A Business Loan EMI Calculator can help calculate the preferred EMI amount. It’s a free-to-use online tool available on the websites of reputed lending institutions like Hero FinCorp. Just enter the loan amount, applicable interest rate and preferred repayment tenure to calculate your Business Loan EMI. The applicant can change the loan term to get an EMI that best suits their repayment capacity.
Documents Required for Business Loan for 10 lakh
Gathering the necessary documents is crucial to apply for a 10 lakh Business Loan in India. To get approval, you may need the following documents:
- Identity proof
- Address proof
- Bank statements (last six months)
- Income documents
Proof of continuation (ITR/Trade licence/Establishment/Sales tax certificate)
- Last 3 years' audited financial statements and projections
Lending institutions require these documents to assess your eligibility and determine the loan amount and terms. Make sure to organise and present these documents in a clear and organised manner to streamline the loan application process. Preparing the necessary documents increases your chances of securing a Business Loan.
Conclusion
Knowing how to get a 10 lakh Business Loan is not a big deal - but the process could be. A solid business plan, researching lenders offering loans up to 10 lakhs, and maintaining a good credit score is essential. Gathering the necessary documents and collateral, if required, is crucial. Regular communication with the lender and prompt follow-up help ensure a smooth application process. Understanding the EMI calculations and considering the loan's impact on net working capital is vital for financial management. Following these steps can increase your chances of securing a 10 lakh Business Loan.
Frequently Asked Questions
1. How to get a 10 lakh Business Loan without collateral? Explore lenders like Hero FinCorp, who offer unsecured Business Loans or government schemes that provide collateral-free financing options based on your business's financial stability and creditworthiness.
2. Can I get a Business Loan without ITR (Income Tax Returns)? Some lenders may offer Business Loans without strict requirements for ITR, especially for startups or businesses with limited financial history. However, alternative documentation and strong financial statements may be necessary.
3. Can we get a Business Loan on salary? Typically, Business Loans are granted to entrepreneurs and self-employed professionals based on their business's financials. Lenders assess business viability, creditworthiness, and repayment capability based on the business's income, turnover, and financial stability.
4. Can I use a 10 lakh business loan to start a new business? Yes, you can use the loan amount to finance startup costs, initial inventory, equipment purchase, marketing, and other business startup expenses.
5. How can I improve my chances of getting a ₹10 lakh business loan approval? Maintain a good credit score, provide accurate and complete documentation, have a viable business plan, and demonstrate repayment ability.
