How to Apply Business Loan Online?

India is fast emerging as the hub of small businesses, specifically startups. Many people are gaining the confidence to turn into entrepreneurs and start a business. However, a vast majority of these small companies require capital to take them further. Each business, startup or corporate, has a unique business cycle and need. Enterprises need financing to establish, expand or buy equipment for their businesses. And these small and medium-sized enterprises often require a quick infusion of money. Business loans tailored to different kinds of businesses are a good way to secure such financing. The demand for a loan for a business varies depending on its size, needs, and the type of industry the business operates in.

Startup business loans, corporate business loans, MSME business loans, and SME business loans are some of the types that come under the umbrella of business loans. New-age fintech companies have made the process of applying for business loans easier and faster. Online business loans have revolutionized the system of lending and borrowing funds for business purposes.

What is a Business Loan?

A business loan is a credit facility offered by Banks/NBFCs to meet the financial requirements of self-employed customers and enterprises. It can be availed by individuals, MSMEs, business owners, entrepreneurs, retailers, traders, manufacturers, self-employed professionals (CAs/Doctors), and several other business entities.

Types of Business Loans

Each enterprise has a different requirement and purpose for securing financing. Broadly categorized, business loans can be either secured (availing of a loan against collateral) or unsecured (no collateral required). Because of the risk factor, the interest rate for unsecured loans is higher than for secured ones. Instant business loans available online are generally unsecured loans.

There are a wide variety of online corporate loans to choose from when getting started. Some of the most common types of business loans include:

• Term Loans
• Working Capital Loans
• Equipment Financing
• Line of Credit

Suggested Read: Business Loan: Know Meaning, Types And How To Apply

What are the Eligibility Criteria for Online Business Loans?

It is to be noted that the eligibility criteria for different lenders could vary.

CategoryEligibility

TenureMinimum 3 years or more for most lenders.

Annual TurnoverDifferent lenders have different thresholds.

Credit ScoreGenerally, 750 or above for banks and 685 and above for NBFCs.

EntitiesSelf-employed professionals (CAs/CSs/Doctors/Architects), Business Owners, Entrepreneurs, Sole Proprietors, Startups, MSMEs, Private and Public Limited Companies, Sole Proprietorships, Partnership Firms, Limited Liability Partnerships (LLPs), etc.

Loan AmountDepends on factors such as the applicant's age, income, business type, credit history etc.

Suggested Read: Eligibility Criteria For Business Loans In India – What You Must Know

Documents Required for an Online Business Loan Application

For applying for an online business loan, here are the basic documents required. Some lenders could ask for additional documents.

The following documents are required along with your online Business Loan application:

• PAN Card – For Company/Firm/Individual

• A copy of any of the following documents as identity proof:
  • Aadhaar Card
  • Passport
  • Voter's ID Card
  • PAN Card
  • Driving License
• A copy of any of the following documents as address proof:
  • Aadhaar Card
  • Passport
  • Voter's ID Card
  • Driving License

• Bank statement for the previous 6 months

• Latest ITR along with computation of income, Balance Sheet, and Profit & Loss account for the previous 2 years, after being CA Certified/Audited

• Proof of continuation (ITR/Trade license/Establishment/Sales Tax Certificate)

• Other Mandatory Documents [Sole Prop. Declaration Or Certified Copy of Partnership Deed, Certified true copy of Memorandum & Articles of Association (certified by Director) & Board resolution (Original)]

How to Apply Online for a Business Loan?

Before you start the online application for a business loan, keep the scanned copy of the above documents for a hassle-free application.

Here are the basic steps involved in applying for a business loan online for most lenders:

• Step 1: Go to the lender’s website or mobile application and click on ‘Apply for Online Business Loan’.

• Step 2: Fill in the required fields with personal and business details.

• Step 3: Upload the necessary documents.

• Step 4: Enter the loan amount and tenure.

• Step 5: Based on the information provided, some lenders calculate your eligibility instantly. For other lenders, you may be given an acknowledgement number for further processing.

• Step 6: An executive from the lending company gets in touch with you to complete the formalities, including the calculation of your eligibility if not done online.

• Step 7: Your online business loan application and the provided details/ documents undergo various levels of verification.

• Step 8: Post verification, you are intimated about your loan eligibility and applicable interest rate.

• Step 9: Post approval and completion of all formalities, the loan is disbursed to your bank account.

Conclusion

The facility of instant business loans, more specifically online business loans, has enabled entrepreneurs to propel their businesses to greater heights. Through these business loans, startups and MSME businesses are flourishing in India.