Business Loan Application Online: Advantages and the Right Way to Apply

Applying for business loans in 2022 has become very easy. Now, anyone can apply for a business loan with just a few clicks on their smart phone or computer. There are many fintech companies and NBFCs who provide the service of business loan application online. This not only makes whole experience fast and quick but also lets user stay at home during this pandemic situation.

Benefits of Online Business Loan Application

A business loan is simply a loan amount that is borrowed to finance an expense of any type in a business. This is true for both small and medium-sized businesses (SME) as well as large companies. It would be great to have some idea on a few benefits business loan application online.

  • Processing time: A faster processing time means that your business can get credit quicker, which will allow you to explore new horizons or take advantage of any opportunities. A timely business loan access can help you expand your marketing capabilities, increase your operations speed, and ultimately increase your profit margins.
  • Collateral-free: Almost every business loan that can be availed online is collateral-free. Such small business loans with no collateral benefit borrower greatly as now the borrower does not have to provide their property as security to avail funding.
  • Protection to your property ownership: as it is an unsecured loan for business, there is no chance of you losing your valuable assets or giving up stock of the company to make up for repayment defaults, if any. A business loan application online allows you to maintain your asset ownership while providing the funds for your business to grow.
  • Improving credit score: Online loan applications are a great way to boost your business credit score. All credit bureaus can see loan accounts duly repaid and thus, your credit score increases significantly.

Eligibility to Get an Online Business Loan

Many NBFCs that provide online loans keep the eligibility conditions simple to process loans quicker. They don’t need to request too many documents, or excessive paperwork, which can slow down the loan approval. Although, borrower must meet certain eligibility criteria to obtain this loan.

  • The business or entity should not fall under blacklisted category.
  • A minimum turnover of Rs.1 Lakh in past three months is preferred.
  • The business should be in operation for at least 1 year.
  • If a loan seeker is an NGO or Trust, then they are not eligible to apply for these kinds of loans.

Required Documents

  1. Bank statement of past one-year
  2. Any proof of business registration
  3. PAN of business and person borrowing the loan
  4. Aadhaar card of the applicant
  5. Deed of partnership in case of partnership business
  6. TIN
  7. MOA
  8. GST certificate
  9. Trade license
  10. ITR

Different types of loans that can be availed through a business loan application online include the following.

  1. Loans for short term: The shorter repayment period means that these loans come with lower fees. A short-term loan is generally given for a period of 3 to 18 month. These loans can be used for working cash finance as well as capital investment. This increases the ease of credit for small and mid-sized enterprises in India.
  2. Finance for equipment: Equipment finance is a popular option to increase cash flow, working capital, and liquidity. Equipment financing involves borrowing money or obtaining a loan to finance the purchase of fixed assets. It is a secured type of loan wherein the lender holds rights to equipment in the event it defaults.
  3. Overdraft credit: This facility can be obtained from both banks as well as online lenders. It allows a businessperson the ability to withdraw money up until a specified limit from their business account. The excess amount can be considered a loan to the business and can be repaid through depositing the money plus interest in the account.

Sending business loan application online is very easy and saves a lot of time. Although, loan seeker must go through all terms and conditions before applying for any such loans.

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