In India, one will find varied loans that are provided by banks,
financial institution and housing finance companies. Some of the popular loans
are home loans, loan against property, auto loan, personal loan, credit card
and many more. The person can even avail loans for initiating new business or
business expansion, i.e. business loan. The person can avail business loan in
India from various banks and financial institutions, such as HDFC, ICICI, Axis,
SBI, Fullerton, DHFL, Standard Chartered, PNB, IDBI and many more. The person can take business loan in India
for various reasons such as for initiating new business, business expansion,
purchase of raw material, purchase of machinery, purchase of warehouse,
purchase of fixed assets, paying off short term debts, increase working capital
and many more.
Business loan in India can be taken in two forms secured loans or
unsecured loans. Secured business loan in India means the customer can avail business
finance without providing security or collateral to the lender for availing the
business loan in India. The person can pledge their business assets or property
as collateral to the lender. The bank provides this loan at low interest rate for the longer tenure.
Also, banks provide large sum of money, i.e. from Rs.20lacs to Rs.1cr, as a
loan to the applicant. The customer can repay the loan amount through EMI. This is so; the
bank has a low risk of lending, as the lender can seize the customer’s property
or asset, in case; the customer does not do loan repayment.
Unsecured business loan in India means, the customer does not have to
provide security or collateral for availing the business finance. The customer
can avail this finance without providing security. Thus, banks provide this
finance at 18-30% interest rate, which is little higher than from other loans
and also; for shorter tenure, i.e. 1 to 5 years. Even they give this loan only
up to Rs.20lacs. This is so; the risk of lending is high, if the customer
defaults in loan repayment than bank has no other way for the recovery of their
loan amount. Thus, banks
check the customer profile before giving approval; for the business loan. The
lender verifies these things through customer documents that customer submits
with the business finance application form with the lender. Base on these
documents, the lender decides about the business loan in India.
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