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

Published on Jan 11, 2021Updated on Nov 29, 2023

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, and have shorter tenures. 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.

Must Read: 5 Government Business Loan Schemes in India

Steps to Apply for a Business Loan Online

  • Click on the “Apply now” button on this page
  • Select Business Loan/SME Loan
  • Enter the information requested correctly and click on “Submit”
  • You will be provided a tracking ID with which you can check the status of your application
  • Shortly, a SMFG India Credit executive will get in touch and inform you about the next steps involved in the process
  • After fulfilling all the requirements and document submission, your application will go through various stages of verification
  • 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
  • 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

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 option 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 rate ensures your cost of capital remains low.
Must Read: 10 Types of Business Loans in India

Business Loan Eligibility Criteria

A Business loan is only considered for the following customer profiles by any lender:

  • Self-employed professionals (SEP): It includes professionals like allopathic doctors, architects, chartered accountants, company secretaries, etc. who are engaged in their profession.
  • Self-employed non-professionals (SENP): The customer profile under this segment includes proprietors, retailers, traders, service providers and manufacturers.
  • Entities: This segment includes the private limited company, limited liability partnership (LLP), closely-held companies and HUFs.

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 year
  • 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, AADHAR)
  • Address proof of the company and individual (Electricity Bill, Passport, AADHAR)
  • Last six months bank statements
  • 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

In Conclusion

For small businesses and entrepreneurs, a business loan provides quick and hassle-free funding that lets you continue with your business plans and goals. Due to its unsecured nature, business owners don’t have to worry about arranging collateral and can focus on the growth of the business more effectively. And, always ensure, you have a good credit score before applying for a business loan.

*T&C Apply

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*Terms and Conditions apply. Loans are disbursed at the discretion of SMFG India Credit.