What is small business?
A small business is a privately-owned enterprise typically operated by a small number of individuals. It is characterised by its relatively modest size in terms of revenue, number of employees, and scale of operations. Small businesses play a vital role in the economy, often serving local communities and contributing to job creation and economic growth. They can operate in various sectors, including retail, services, manufacturing, and technology. Small business owners are responsible for managing day-to-day operations, making strategic decisions, and overseeing financial matters. While they may face challenges such as limited resources and competition, small businesses also offer flexibility, innovation, and the opportunity for entrepreneurship and independence.
What is small business lending?
Small business lending refers to the provision of financial support to small enterprises by banks, financial institutions, or alternative lenders. These loans are tailored to meet the unique needs of small businesses, offering funds for various purposes like expansion, equipment purchase, inventory management, or working capital.
Business loanscan provide essential capital to cover operational expenses, invest in growth opportunities, or manage cash flow fluctuations. With flexible repayment terms, competitive interest rates, and quick disbursal, business loans empower small business owners to seize growth opportunities, overcome financial challenges, and achieve their entrepreneurial aspirations. Whether it's to launch a new venture, expand an existing one, or navigate through tough times, small business lending plays a vital role in fuelling economic growth and fostering entrepreneurship.
Types of small business loans in India
Small businesses in India have access to various types of loans to support their financial needs:
- Term loans: Offered for a specific term with fixed or variable interest rates, used for various purposes like expansion or equipment purchase.
- Working capital loans: Provide funds to cover daily operations like inventory purchase and payroll.
- Equipment financing: Specifically for purchasing machinery or equipment, often with the equipment itself serving as collateral.
- Business line of credit: Offers flexible access to funds up to a predetermined limit, useful for managing cash flow fluctuations.
- Invoice financing: Advances funds against outstanding invoices, helping to bridge cash flow gaps while awaiting payment from customers.
These loan types cater to different business requirements, providing financial flexibility and support for growth and stability, which are essential for implementing small business ideas.
How do small business loan works?
Small business loans provide financial support to entrepreneurs for various purposes, such as starting a new venture, expanding operations, or covering day-to-day expenses. Here's how they work:
- Application: The business owner applies for a loan from a bank or financial institution.
- Assessment: The lender evaluates the business's creditworthiness, financial history, and ability to repay the loan.
- Approval: If approved, the loan terms, including interest rate and repayment schedule, are determined.
- Funding: Once accepted, the funds are disbursed to the business owner's account.
- Repayment: The borrower repays the loan in instalments over a specified period, including interest.
- Use: The business utilises the funds for its intended purpose, such as purchasing equipment, hiring employees, or expanding operations.
- Benefits: Small business loans provide access to capital, enabling businesses to grow and thrive, contributing to economic development and job creation.
Eligibility criteria for our business loan
Anyone can apply for our business loan if they meet the five basic criteria mentioned below. If you meet all the business loan eligibility criteria, you will need a set of documents to complete your application process.
Eligibility criteria
- Nationality: Indian
- Business vintage: At least 3 years
- CIBIL Score: 685 or higher
- Work status: Self-employed
- Age: 24 years to 80 years*
Documents required
- KYC documents - Aadhaar/ passport/ voter’s ID/ driving license/ letter from NPR/ NREGA job card
- PAN card
- Proof of business ownership
- Other financial documents
*Higher age limit is applicable at the time of loan maturity.
How to apply for our business loan
To apply for Bajaj FinservBusiness loan, simply following these steps:
- Click on the ‘APPLY' button on this page.
- Enter your 10-digit mobile number and OTP.
- Fill in the application form with your basic details, such as your full name, PAN, date of birth, and PIN code.
- Once you enter all your details, please click on ‘PROCEED’ to visit the loan selection page.
- Enter the loan amount that you need. Choose from our three business loan variants – Term, Flexi Term, and Flexi Hybrid.
- Choose the repayment tenure – you can select tenure options of 12 months to 96 months and click on ‘PROCEED’.
- Complete your KYC and submit your business loan application.
Our representative will guide you on the next steps. The loan amount will be transferred to your bank account upon verification of your documents.
Things to consider before applying for a small business loan
Before applying for a small business loan, consider the following:
- Assess your needs: Determine the purpose of the loan and the amount required.
- Check eligibility criteria: Ensure you meet the lender's requirements regarding credit score, revenue, and business age.
- Research lenders: Compare interest rates, fees, and repayment terms from different lenders.
- Understand loan terms: Read the fine print to comprehend interest rates, repayment schedules, and any hidden costs.
- Evaluate risk: Consider the impact of taking on debt on your business's cash flow and profitability.
- Prepare documentation: Gather financial statements, tax returns, and business plans required for the loan application.
- Explore alternatives: Assess alternative funding options like grants, crowdfunding, or personal savings before committing to a loan.
Careful consideration of these factors helps ensure that a small business loan meets your needs and contributes positively to your business's growth.
