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Business Loan for a startup in India

Business Loan for a startup in India

Business Loan for startup in India

Loans are essential to all business enterprises for their establishment, operations, growth, and upgrades from time to time. The financial allocation for any business is likely to be enormous. The promoter businessperson has to seek a loan from a suitable lender for financing the project. In fact, loans are the backbone of the lending ecosystem. Most business loans are taken for specific one-time purposes. They reimburse in a defined mutually agreed upon time frame. These loans are thus called business-term loans. Also, a term loan may require a substantial down payment to lessen the payment amounts and the total cost of the loan. Looking after a Business loan for a startup in India? Your search could stop at Terkar Capital.

What is business Term Loan?

Typically, Term Loan designate to meet the one-time capital needs of an enterprise is restricted to a pre-defined term. The capital requirement may be for the acquisition of Land, Building and Plant Machinery, or other necessities. That described the business, including Working Capital as part of a composite loan.

The loan is prolonge to both industrial and non-industrial borrowers. That includes the manufacture, services, or trading. The term loan is normally classified based on the time scale of its life, signified as short-term or long-term.

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 for availing of this loan. 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. 2 Cr. However, such loans are usually short-term loans to reimburse 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:

Overdraft is a different form of loan in which the financial institution arises a credit limit, as per the necessity. The interest rate is repaid only on the amount used and not on the whole 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 Terkar Capital will help you?

A business term loan is to fund your quick business needs. Terkar capital is one of the top financial institutions headquartered in Pune and has a corporate office in Mumbai. We provide business loans for startups 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.

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