Finance is the blood of business. Any business needs an adequate amount of financing in order to survive, operate and grow. Business loans provide financial assistance to organizations for development and extension through financing tools, working capital needs, or hardware purchases to support the business.
As the name suggests, overdraft means withdrawing from your checking account. For this office, an agreed rate of interest will be charged. In the event that you do not overdraw from your account, you will not be charged any interest.
2- Term loans
Loans can be availed for here and now term, long term or medium term. Term loans consist of two types, unsecured trade credits and secured trade advances. Fixed trade credit requires you to promise a collateral with the bank, whereas unsecured trade advance does not require any collateral/insurance. Secured business advances have reduced financing costs when compared to unsecured business loans.
Invoice reduction is an instant money back technology. You need to provide trade invoices, which will be cashed at an amount less than the invoice value. The bank reserves the distinction as a reduction fee. You have to send the necessary records such as requests for proposals, transfer receipts, etc. that you agree to the trades.
Letter of Credit:
The acknowledgment letter is otherwise called an LC. A letter of credit is a letter of credit issued by the buyer’s bank declaring that the buyer will honor the installment, when the merchant transfers the goods and projects as agreed in the wording and presentation cases. LC is largely used as part of global business.
Mudra Yojana is a government-launched commercial loan scheme for small and medium businesses in India. The government provides funds to the banks and the banks in turn finance businesses in India. Therefore, banks offer MUDRA loans at a lower rate of interest, as compared to standard business loans.
1. Who is eligible to benefit?
– Entrepreneurs or self-employed professionals
Limited or private limited companies
Manufacturer, retailer or service providers
The age of the applicant must be between 21 to 65 years old.
The business must have been in existence for at least 3 years.
The business should have been profitable for the past two years.
The turnover should be at least 40-50 thousand rupees per year.
Minimum profit earned should be Rs 1-2 Lakhs.
– Last 3 years ITR
Proof of work
A recent photo of the applicant
– Proof of Identity: Aadhar Card, Voter ID Card, PAN Card, Company Registration Certificate, etc.
Proof of residence
– Other documents such as declaration of sole proprietorship, certified copy of partnership contract, certified copy of memorandum
Assembly and articles of association.
Read more for detailed information: https://indianmoney.com/articles/how-to-get-a-business-loan-from-a-bank