Business Loan for startup in India
Finance plays a vital role in supporting business enterprises throughout their lifecycle, facilitating their establishment, enabling smooth operations, driving growth, and facilitating necessary upgrades as and when required. So, the financial allocation for any business is likely to be enormous. However, the promoter businessperson has to seek a loan for a startup business from a suitable lender.
Business-term loans are crucial for startups in India. Entrepreneurs use these loans for specific purposes and repay them within a pre-agreed time frame. A substantial down payment may be required to reduce the payment amounts and total loan cost.
Meeting Capital Needs and Loan Classification
Term Loans meet one-time capital needs, such as acquiring land, machinery, or working capital. They are available to industrial and non-industrial borrowers, including manufacturing, services, and trading. Short-term and long-term classifications are based on their time scale.
Discover the opportunity of working capital loans specifically designed for startups. Take a closer look at the incredible options available at Terkar Capital.
Types of Term Loan:
The main determinant is the specified period. A term loan is categorized as:
1. Short-Term Loan:
- Usually reimbursed within a maximum of 5 years.
2. Long Term Loans:
- The repayment duration for this loan goes beyond five years, which can prolong up to 30 years.
Term loans can be further described depending on the security necessity imposed by the lenders. Based on this model, a term loan can be further categorized as:
A. Secured
Some collateral security has to be presented to avail of a secured loan for startups. So, Most Banks and NBFC lenders seek suitable security for business loans.
B. Unsecured
These loans are granted without any collateral as security. Most of the Digital Platforms implementing business loans offer unsecured loans. It may be for amounts up to Rs. 5 Cr. However, such loans are usually short-term loans to be reimbursed in 2 years.
Term Loan Eligibility – Business Loan
- Age Criteria: The minimum age of the candidate should be 21 years at the time of loan request and the maximum 65 years at the period of loan maturity
- The applicant should be an Indian citizen
- The applicant should maintain a good credit score
- Applicants should sustain a regular source of income
Term Loan Examples related to Business Loan
1. Working Capital Loan
Businesses that require immediate funds to manage the cash flow or to meet day-to-day business expenditures opt for working capital loans. Working capital loans are normally termed short-term loans. Thus, It reimburses within 12 months from the date of loan disbursal.
2. Overdraft
OD or Overdraft is a different loan form in which the financial institution raises a credit limit, as necessary. The interest rate is repaid only on the amount used, not the specified withdrawal limit. The repayment security is as low as 1 month and can pass up to 12 months. Every year the limit has to be restored by the borrower from the lender.
3. Equipment Financing
Businesses can use this type of loan. And industries for financing equipment or vehicles used for several purposes like agriculture, farming, commercial transportation, construction, etc. The equipment finance loan amount shall range wheresoever between Rs. 1 lakh to Rs. 10 crores. The term loan interest rate depends on the applicant’s profile and kind of business.
How does Terkar Capital help in availing Loan for startup business?
Business loans are crucial in supporting the establishment, growth, and facilitating necessary upgrades. Also known as a term loan to fund your quick business needs. We, at Terkar Capital, provide loans for startup businesses in India. We are headquartered at Prabhat Road Pune & have a corporate office at BKC Mumbai. However, we are operational across major cities in India. With our absolute assistance and guidance, we help you choose the right repayment structure and suggest to you which type of loan you should go for.
