Eligibility Criteria for Business Loans

Before opting for business loans, we have to know the eligibility criteria. Do bear in mind that the eligibility criteria may differ from lender to lender. 

There are two types of Business Loans: Secured Businesses Loans and Unsecured Businesses Loans. Secured businesses loans are obtained against some type of personal guarantee or any valuable asset as collateral. Examples of secured business loans are equipment loans, inventory loans, term loans, and loan against property. Unsecured businesses loans are taken when businessmen and self-employed people desire to take the unsecured business finance with no collateral requirements due to the following reasons:

Following are the business loan eligibility criteria most banks and NBFCs in India follow. 

Age Criteria: The minimum age criteria is 18 years and maximum age criteria is 65 years

Eligible Entities: Self-employed non-professionals – Private limited companies, sole proprietors, partnership firms, public limited companies involved in the business of manufacturing, trading and services 

Self-employed professionals such as Doctors, CA, CS, Architects.

Business Vintage: For self-employed professionals minimum 2-3 years and for self-employed businessmen 5 years

Business experience/stability: Minimum 6 months and above. The business location should remain the same

Loan Amount: Rs. 50,000 to Rs. 100 Crore 

Annual Turnover: Min. Rs. 25 lakh to Rs. 1 Crore and above

CIBIL Score: 650-700 or above

Additional Criteria: Applicant must own either a residence, office, or shop

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