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How to Apply for a Business Loan Online? (Step by Step Guide)

Published on Jan 11, 2021Updated on Jan 2, 2024

How to Apply for a Business Loan Online? (Step by Step Guide)

Business loans are primarily an unsecured loan type that helps business owners and entrepreneurs to meet business goals and run their operations smoothly. A business loan can be taken for working capital needs, buying new machinery, capital expenditure, marketing expenses and much more. With easy eligibility criteria and flexible repayment terms- you can ensure growth of your business while managing cash flow in a better way.

Business loans can be secured or unsecured. Secured business loans are those which are secured against assets pledged by the borrower as collateral. These loans typically involve large amounts (more than INR 75 Lakhs*) with tenures upto 15 years or so (depending on the nature of the asset pledged) which are required by business owners for long term investments. On the other hand, unsecured business loans are for smaller amounts up to 75 Lakhs*, and have shorter tenures up to 48 months. These are typically meant to help business owners meet short term goals such as purchase or upgradation of machinery / inventory, working capital, etc.

How to Apply for a Business Loan ?

There are two ways through which you can avail a business loan, either through an online process or by visiting the nearest branch office of the lender.

However, before applying for a business loan, use the online free business loan eligibility calculator and business loan EMI calculator to know the maximum loan amount you may be eligible for, and the best tenure you can select so that you can easily manage your monthly EMIs within your budget. It is also advisable to go through the basic business loan eligibility criteria of the lender as well as the documentation requirements before applying to reduce the chances of rejection.

Steps to Apply for a Business Loan Online

  • Step 1 - Click on the Apply now button on this page
  • Step 2 - Select Business Loan/SME Loan
  • Step 3 - Enter the information requested correctly and click on “Submit”
  • Step 4 - You will be provided a tracking ID with which you can check the status of your application
  • Step 5 - Shortly, a SMFG India Credit executive will get in touch and inform you about the next steps involved in the process
  • Step 6 - After fulfilling all the requirements and document submission, your application will go through various stages of verification
  • Step 7 - Once the verification is complete and your loan application is approved, the lender will inform you the rate of interest and terms of conditions of the loan
  • Step 8 - Post signing the loan documents, the funds will be disbursed to the borrower’s bank account

While signing the loan documents, carefully read through the terms and conditions including the proceeding fees, repayment tenure, foreclosure charges* and other charges to eliminate the chances of any future discrepancies. *T&C apply

How to Calculate Your Business Loan EMI?

Several factors are used to calculate your business loan EMI. These typically include the total loan amount, rate of interest, and repayment tenure. However, as availing of a business loan is a big decision, it is helpful to get a clear idea of the kind of financial planning you would need to do. A business loan EMI calculator is a useful tool to get a realistic idea of your monthly financial commitments.

Simply input your loan amount, interest rate and loan tenure into the calculator and press ‘Submit.’ The results will be immediately displayed on the screen. It is important to note that this EMI is just an estimate. The final EMI will be determined after a complete assessment of your eligibility and creditworthiness by the lending institution.

Features of Unsecured Business Loans

  1. Flexible Loan Option: The loan tenure ranges upto 48 months*; you can ensure timely repayments as per the business’s cash generation ability. Further, you can prepay the loan amount without any extra charges or foreclosure charges*. *T&;C apply
  2. Easy Financing Option: With quick and easy financing options of up to Rs 75 Lakhs* For small businesses, you can meet all your business goals effectively.
  3. No Collateral: You don’t have to pledge asset as collateral to secure a business loan to finance your small business
  4. Custom made Loan Solutions: As every business is different and has different requirements, with custom made financing solutions, you can meet the business goals and also improve the growth rate of your business. Further, competitive interest rates ensure your cost of capital remains low.
Must Read: 10 Types of Business Loans in India

Business Loan Eligibility Criteria

  • The individual should be engaged in the current business for at least three years and have a minimum of five years of business experience
  • The minimum age eligibility is 22 years while applying for the loan and should be less than 65 years at the time of completion of the loan tenure
  • The enterprise should have a minimum turnover of Rs 10 lakh and making profits for the past two years
  • The minimum annual Income Tax Returns of the enterprise should be Rs 2 lakh
  • CIBIL score of 750 and above

Documents Required for Business Loan

  • Recent photograph
  • Valid identity proof of the individual (PAN, AADHAAR)
  • Address proof of the company and individual (Electricity Bill, Passport, AADHAAR)
  • Last six months bank statement
  • Financial statements of the business along with ITR for the past two years
  • Trade license, Establishment, GST certificate of the business
  • Sole proprietorship, partnership deed and certified memorandum of association of the business

5 Things To Take To Ensure That Your Loan Gets Approved

Applying for a business loan is one thing, and getting it approved is a different joy altogether. Here are some strategies you can use to ensure that your loan application is accepted:

  • Create a comprehensive business plan showcasing your vision and strategy. This is the first step to building trust with lenders.
  • Determine the loan amount along with factoring in any additional/emergency expenses that may be required.
  • Always try to maintain a CIBIL score of 700 or higher, as a score below this might hinder loan approval.
  • Always prioritize improving your credit score before applying for a loan. You can do this by adopting health credit practices.
  • Tools like business loan eligibility and EMI calculators help you get an estimate of required finances. Compare lenders to find the best fit for your needs.
  • Remember to maintain meticulous financial records and ensure all necessary documents are organized and up-to-date for a smoother loan application process.

Conclusion

To ensure loan approval, adopting a comprehensive approach is essential. Crafting a detailed business plan builds trust with lenders, while maintaining a robust CIBIL score above 700 strengthens your creditworthiness. Take control of your financial journey and apply for a business loan with SMFG India Credit today. Your aspirations are closer than you think, and SMFG India Credit is here to support your entrepreneurial dreams.

* Please note that this article is for your knowledge only. Loans are disbursed at the sole discretion of SMFG India Credit. Final approval, loan terms, disbursal process, foreclosure charges and foreclosure process will be subject to SMFG India Credit's policy at the time of loan application. If you wish to know more about our products and services, please contact us

FAQs

Do business credit scores also matter while availing of a loan for your business?

Yes, having a good credit score certainly favours a smoother loan process for your business. It is best to maintain a CIBIL score over 700 as this demonstrates healthy credit behaviour to lenders.

Do business loans impact taxes?

Although businesses can often deduct the interest payments on their loans for tax purposes, the principal amount borrowed does not usually offer similar benefits. Thus, having a thorough understanding of the tax implications and deductions associated with business loans is essential for proper tax planning and compliance.

What are the four stages of the Business loan process?

The four stages involved in availing of a business loan are as follows:

  • Submitting your application along with the required documents.
  • In the evaluation stage, the lender carefully evaluates your creditworthiness and assesses the viability of your business.
  • Based on this assessment, the lender will then either approve or reject your loan request.
  • After the approval of your loan request, the lender will credit the funds directly into your designated business account for immediate use.

How to apply for an online business loan?

Getting started with an online business loan application is simple and involves the following steps:

  • Go to the official loan application portal.
  • Begin with the application by providing your personal details and business information.
  • Upload the requisite documents.
  • An executive will contact you to help you with any pending formalities.

What is a Business Loan EMI calculator?

A business loan EMI calculator is a useful tool for getting an estimate of the monthly installments on the loan amount. It uses the loan amount, interest rate, and loan tenure to display the EMI amount.

What is the maximum amount of business loan one can apply for?

You can apply for business loans as high as INR 75 lakhs*. However, the final loan amount is fixed after factoring in your creditworthiness, business financials, and lender criteria.

What credit score is required for business loans?

Having a CIBIL score of 700 and more is considered desirable for availing of business loans.

Which loan is best for business?

The best business loan usually depends on your specific needs, financial situation, and business goals. Additionally, factors such as interest rate, loan amount, repayment term, and eligibility requirements play a key role in providing a loan that fits your profile the best.

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