With so much around us changing, this is the right time to start your own business. While the start-up seems a very common word these days, running it successfully can be very difficult. A report says that around 20% of start-ups close within their first two years. Just over 50% of businesses make it to their fifth year. Only 25% of businesses make it to the 15-year mark.
What makes the difference, first and foremost it is the idea but the second most important thing in a start-up is capital. While you may start with less money, to sustain you need a minimum capital which will help you stand out from the many competitors. This is where the business loan kicks in. This article will act as a guide to help you understand what start up business loan in India is and how you can get it.
What is a Start-up Business Loan?
A financial startup 2020 instrument, helping new ventures to grow and flourish is known as the Start-up business loan. It provides funds to individuals who want to start a new business or have just entered the entrepreneur race. As these are for start-ups no credit history is required for funding.
Features and benefits
With so many individuals entering the entrepreneurial market, business loans help them in competing. There are various benefits of a start-up loan.
- Flexibility – These loans are designed with more flexibility, to ensure that the business owners can concentrate on growing their business, than worry about the repayment of the loan amount. Fullerton India also offers some customized packages which one can avail of as per their convenience.
- Collateral – These loans are for freshers in business; thus, you can avail of a loan of Up to Rs 50 Lakhs without any collateral.
- Availability of Funds – The loan application once approved; the amount is credited into your bank account without any delay.
Eligibility Criteria:
The eligibility criteria for start-up loans can vary for different lenders. However, some of the common ones are:
∙ The applicant must be a resident citizen of India.
∙ The applicant must be between 21 to 65 years of age.
∙ The CIBIL score of the applicant must be at least 700.
∙ The business for which a loan is required must be operational for at least 2 years.
∙ The minimum income from the business must be Rs 2 lakhs per year.
Documents Required
To avail of the loan, one has to submit certain documents like:
∙ Identity Proof
∙ Address Proof
∙ Proof of Age
∙ Income Statement
∙ Bank Statements
∙ Signature
∙ Photos – 2 copies passport size.
∙ Financial statements audited by a CA for the past 2 consecutive years
∙ IT returns for the last 2 consecutive years
How to apply for a Start-up loan?
To apply for a Start-up Business Loan, customers can visit the lender’s website to check & compare loan deals for start-ups at competitive interest rates. Just follow these simple steps:
Step 1: Visit the lender’s website to check the business loan options being offered by those financial institutions.
Step 2: Click on the Apply for Loan tab and fill in all your personal, professional, and banking details
Step 3: you are required to submit some documents which will help make your loan application stronger.
Step 4: Once you have submitted the details, your application is reviewed and if approved, an executive from the lender’s end will contact you for the further procedure.
Conclusion
To support the start-ups even the Government of India has released some schemes like Start-up India, Pradhan Mantri Mudra Yojana, Credit Guarantee, and many more. With so much to offer for start-ups, make sure that you are choosing the right lender for your loan. You can use the business loan calculator to see which lender is offering the best terms which suit your requirement.
