Points to consider before getting a business loan.

Every business needs a business plan. Majority of commercial applications require more documents as a proof of identity. If you are finding seamless and quick loan disbursal for your business, then look no further.

Buddy Loan is one of the biggest loan aggregators in India that disburses loans at lower interest rates starting at 11.99% p.a. They also have customised EMI options that help you work your credit score with ease.

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Applying for a business loan gives you numerous benefits like tax returns, interest rate reduction based on credit score, faster approval rate based on reputation of the company.

Availing a marriage loan

Any businessman or an entrepreneur can be accommodated with lower interest rates starting at 11.99% p.a. based on their credit history. Business loan is an unsecured loan, where in you do not need to pledge any asset or provide any collateral.

There are certain factors the borrower will have to look for will applying for businessloan. Using the EMI calculator, pre-plan the wedding expenses by roughly estimating the expenses. The EMI scale is present in every loan site to help you calculate your monthly EMIs, total sum of interest rate and more.

By doing this, you will auto check your credit score and thus it is easier to maintain that too. Research about the loan offers carefully and the EMIs that the financial institution can provide.

Eligibility criteria  

Businessloan is nothing but a personal loan which is availed during the financial shortcomings for business development or launching new sectors of business. There are many competitive interest rates from which you will have to pick the appropriate ones. 

Borrower should bear in mind that he/she should be min 25 years – 60 years old to avail the loan. It is more helpful if the borrower is either salaried or self-employed with a minimum salary of Rs. 20,000/-. The approval rate and interest rate depend on the borrowers’ credit history.

The applicant can avail instant business loans up to Rs. 15 lakhs for an application. The borrower can discuss further with the lender for best EMI options in between the loan tenure of 3 months to 5 years.

EMI & Tenure

Buddy Loan disburses businessloans for a loan tenure of 3 months to 5 years. The better option is that you could tell your lender if there are certain concerns and EMI payment can customise such that it only enhances your credit score.

Conclusion  

With the recent extension of moratorium period several public sector banks, financial institutions and NBFCs will give a margin of time to clear out earlier debts if any and relax for the repayment on the present loan. Business loans are very beneficial if you have a co-applicant and hence the loan amount is huge.

How is EMI calculated on my business loan at Buddy Loan?

The EMI on your business loan is the amount you will be paying monthly to your loan lender.
This amount is computed to include the interest and the principal amount. You pay steadily fixed
EMIs for the tenure of the loan, progressively, reducing the amount of money you owe the bank.
The bank may choose to calculate the EMI using the reducing balance method or the flat rate
method. `

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However, loan aggregators help you with the best repayment options for a good 5 years.
Explore Buddy Loan in order to reap more benefit for a Instant business loan online. Meaning more benefits on tax.
Factors that affect the size of your EMI
Change in loan tenure: When your loan tenure is changed, even by a month, it changes the size
of EMI. When you want a smaller EMI amount, the tenure is elongated. However, the longer the
tenure, the higher the interest rate.
Higher EMI amounts result in a shorter tenure and lower interest rate.
Prepayment of the firsts EMI
When you pay the first EMI in advance, it reduces the size of the principal that you owe the
bank. Therefore, as a result, your consecutive EMI amounts will be reduced.
Shifting your loan to a different lender:
Different lenders have different interest rates, and therefore, the amount of EMI will vary. When
you transfer your business loan to a different lender, then your payment changes.
Flat rate method
Principal amount+ interest on the principal = EMI
Number of periods* number of months

Reducing balance Method 1
The mathematical formula to calculate EMI
P*R*(1+R)^N = EMI
[(1+R)^n-1
P =principal amount
R =The rate of interest
N = Number of repayment periods
Method 2
Using an excel worksheet
Using the same variables but the function
PMT=Rate* number of repayment periods* amount of loan
Method 3
Use an online calculator. If you are applying for an online loan, most providers will have an
online calculator where you key in the variables and compute your EMI.
The bank computes the interest you pay using two methods. These are:
• Simple interest. This type of investment is calculated only on the amount of loan given
out.
Principal* interest rate * the Number of repayment periods.
• Compound interest: In this method, the interest is added back to the amount borrowed
for you to calculate the next year's interest
Principal*interest rate= interest for year 1
Principal interest for year 1) * interest rate = interest for year 2
Factors affecting your business loan interest rate
 Amount of interest paid depends on the prevailing bank interest rates
 Your credit score matters a lot
 Late payments cause an increase in your interest rate
 The terms of loan affect the interest rate
 The interest rate is the price you have to pay
These factors will, in turn, affect your EMI. Therefore, it is paramount to be keen on each
element as you apply for your business loan.

What are the uses of a business loan?

Uses Of Business Loan

A business loan is a money you procure from a lender to be able to facilitate the operations of your business. It may be a secured business loan or an unsecured business loan. Make life easier and better by availing a business loan with Buddy Loan, get high benefactors. 

The lenders have made it easy for you to apply for an instant business loan online. Confirm that you fulfil the requirements to apply for an online business loan and decide on the amount you need. Make your application and wait for the bank to verify your request.

Purposes for the instant business loan are:

Expansion

One of the reasons why businesses apply for SME loans is to expand. When business is flourishing, you may need an expansion opportunity. When you make use of the opportunity, you need to ensure that your cash flow and profits are not interfered with. You approach a bank and request a business loan. Start a business.

Start a business

The most common reason people apply from an unsecured business loan is to start a business. As much as this is not a very wise reason, it does offer a reprieve for dire situations.

Purchase Equipment

Almost all business requires equipment or two to run efficiently. This expenditure being capital in nature may be burdensome for a new or expanding business to bear. Therefore, a business loan would come in handy to assist the business.

Inventory

A business continually needs to stock on their inventory. They need to have stock they can sell as their buyers prepare to pay for what they have bought from them. Inventory is one of the largest and complicated a business has to manage. You always have to stock enough options for your customers to buy. Consider applying for a business loan online to stay ahead of trends and customer demands, as well as keep your cash flow optimum.

Cash Flow

When you are dealing with customers who won't pay, and you are still stuck with inventory, you have not sold, then cash flow may be a problem. However, you need not be stuck when you can apply for an SME loan online to finance your cash flow. Your business stays afloat as you can pay for your operating costs using the money. 

A short-term loan provides money to be used for your regular operational costs and can help your business survive when profits are low. By keeping money flowing through your business, you can continue to get new customers to drive revenue while making up for other losses.

What are the features of a business loan?

Features of a business loan

In today’s economy, lenders have become increasingly approachable. With the doors open for all types of borrowers, a business loan comes in handy when the borrower has specific requirements. Buddy Loan can help increase the benefactors with the business loan you avail. 

You can get a business loan to set up shop, or expand his/her business.

But what exactly is a business loan?

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What is a business loan?

As the name suggests, a business loan is a type of loan intended to be used with a business module in place. Be it to start a business, or to expand business; business loans are designed to comply with a borrower’s requirements and plans depending on the business module in hand. 

Business loans are available in an almost exhaustive range. 

Bank loans, guarantor loans, mezzanine loans, asset-based financing, equity-based financing, invoice-based loans, microloans, and startup financing are some of the broader categories one can choose from that caters to his/her requirements.

Salient features

Business loans, in a sense, are better than “bad credit” loans like personal loans. Here is a unique list of features a business loan has to offer. 

1. Convenient and accessible: Applying for a business loan today is no mountain climb is you have a good credit history. There are hundreds of options available in the markets today.
2. Multiple options: We now know a business loan application is not limited by the choices available to him/her. The borrower can opt for the option best suited for his/her business needs.
3. Flexible repayment options: Business loans are designed in a way so as not to hamper the current business module of the borrower. 
4. Hassle-free business loan application process: These loans are so quickly disbursed, a borrower need not run around in circles and can apply for a business loan online unlike the old traditional ways.
5. Instant approval: Business loans are usually disbursed within 24 hours, depending on the amount the borrower has applied for. Even so, a borrower does not have to wait for days to get his/her business loan approved.
6. No collateral required: This, of course, depends on the type of loan a borrower has applied for. Unlike mezzanine loans or asset-based financing, most business loans do not require collateral or mortgage. 

 With lower interest rates, business loans are designed with such ingenuity that these do not hamper your current cash flow and instead aid in regulating and improving your current cash flow.

Buddy Loan helps you connect to the best-suited investor with plans tailored to your needs and requirements. With Buddy Loan by your side, running around looking for investors is a thing of the past.

Happy financing!

Is PAN card mandatory to get a business loan?

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YES! Any financial transaction executed in India between an investor and a borrower, be it an individual looking for a personal loan, a business owner looking for a business loan, a student looking for an educational loan, or a potential house owner looking for a home loan, is based on his/her credit history and credit scores. Buddy Loan offers such business loan with potential benefactors. 

And these credit scores are linked to what we commonly refer to as the PAN. The Primary Account Number is a unique identification number assigned to every taxpayer in India. All tax-related records are linked against this single Identification number. 

Although Aadhar has now taken over most of these roles, the PAN card remains an essential piece of documentation that is required for almost all finance-based decisions.

Let us have a quick look at what documents are required for applying to a business loan.

Documentation:

Buddy Loan has a varied range of investors, depending on the borrower’s requirements. Although documentation may vary from lender to lender, it spans in and around the following list.

1. Identity proof (Aadhar Card, Driving License/PAN card/Passport/Voter ID)
2. Address proof (Electricity bill/Telephone bill/Passport/Trade license/Lease agreement/Sales Tax certificate)
3. Income proof (Bank statements ranging from 3 months to two years, depending on the lender’s requirements)
4. Financial documents (ITR for the past two years along with balance sheets, Income and profit & loss a/c)
5. Business Ownership proof (For existing business owners only. This is not applicable for startup financing seekers)

Although documentation requirements vary from lender to lender, the PAN is a staple across the financial world due to its ease of accessibility. And as most of these transactions are electronically processed, it is always a better option to have a PAN card, if not mandatory.

If you do not have a PAN, you can always apply for one online. Once you complete your documentation, the PAN card is usually dispatched within 15 business days to your registered permanent address. Another way of going about it is to visit any government-authorized agent and get one issued to you. 

Having said that, there are other ways one can go about applying for a loan. Here are some of them.

·         Ensure you have a good credit score. The average score ranges between 700-900, 700 being the average, and 900 being the highest. 

·         Bank statements and ITR returns can help investors track your financial activities in the absence of a PAN.

·         A healthy relationship with your banks helps you qualify for loans.

Loans are simply disbursed based on address proofs, financial activity, and your ITR returns. However, citizen responsibility dictates you have a PAN. With Buddy Loan, find the best-suited investor for your needs, and make full use of the online documentation option, with a range of alternatives to make your experience of applying for a business loan sweet and hassle-free.

Happy financing! 

Is Form 16 required for a business loan?

Nowadays, with the government deciding to encourage small business growth in the country, individuals are encouraged to apply for small business loans. Avail a business loan through best of loan aggregators that help your credit score, lower interest rates and more with Buddy Loan.

Business loans can be unsecured business loans or secured business loans. Getting a small business loan has gotten much easier than in the past. Even a buddy loan can be availed for hassle-free borrowing.

One can apply for a small business loan through banks, i.e., the offline mode, or in case one prefers the easy, convenient mode, online business loans are also available. 

Various schemes with secured business loans (loans backed with some sort of collateral as security) as well as unsecured business loans (loans not backed with some sort of collateral as security) are available with banks as well as through online loan agencies. 

Applying for a business loan online is easy with the facility to upload documents online and the maximum turnaround time offered by many institutions in twenty-four hours. Some types of online loans are also approved instantly. 

Several documents are required when applying for a business loan.

The Credit Score is an essential document in that any lender, whether a bank or an institution providing online loans, will check the Credit Score to understand the credit history as well as the pattern of repayment. This is especially important in assessing the repayment potential of the borrower.

The age of the business, i.e., the number of years that the business is in operation, will be taken into consideration to check the stability of the business. 

The potential collateral that can be offered will also be considered in case of a secured business loan. The end use of the funds, i.e., the purpose for which the funds will be used, will also be taken into consideration. 

Although it is possible in theory to get a hundred per cent loan for starting a small business, most banks and financial institutions are wary of providing the same and prefer to give part-funding with some capital that is self-funded by the owner(s) of the small business.   

In most circumstances, it is the salaried people who want to start a small business to increase earnings and get the freedom to work in fields and areas they enjoy, as per their convenience. In such circumstances, banks and financial institutions may request Form 16 as evidence of past earnings.

Form 16 is a form that is to be mandatorily issued by companies and organizations to individuals who have worked in their organization, irrespective of any TDS (Tax Deducted at Source) deduction from the salary of the employee. Therefore, Form 16 serves the dual purpose of checking the employment status and stability of finance of the individual along with the income potential of the individual.

In case the business loan is taken through the route of a personal loan, Form 16 is asked by almost all banks and financial institutions. This is done to understand the level of income of the individual and the ability to repay the loan.

 Loans taken where the EMI (equated monthly instalment) is of a greater proportion to the income would mean that the ability to repay is reduced in certain circumstances. Banks and financial institutions prefer to have certain ratios when it comes to the income potential as well as the EMI (equated monthly instalment). This is the area where Form 16 is of great help to banks as well as financial institutions.   

Is Aadhaar card mandatory for a business loan?

When one does decide to opt for a business, one of the first things that come to mind is, Do I apply for a business loan? Do banks provide small business loans? Is it possible to get an unsecured business loan online? Can I avail of a buddy loan where a business loan can be availed hassle-free? all this and more benefits can be crossed using Buddy Loan. Avail a business loan with Buddy Loan, now! 

One of the first thoughts that comes to mind is the formalities that need to be completed as part of the process to avail of a business loan. 

There are certain KYC (Know Your Customer) requirements as well. Whether applying for a loan online or whether one decides to go to a bank or a financial institution and undergo the physical process of the offline application, it is mandatory by law as enacted by the government to collect certain KYC (Know Your Customer) documentation.

Banks and financial institutions are obligated by law to collect such information as well as to keep the said documentation updated from time to time.

Various documents can be considered as eligible to be considered as eligible or valid KYC (Know Your Customer) documentation. Some such documentation would include Passport, Voter Identity Card, Driving License, PAN Card, NREGA Card as well as Aadhar Letter/Card. 

The KYC (Know Your Customer) documentation is required as proof of identity as well as proof of address/residence. Anyone document is allowed, and Aadhar Card is not mandatorily required as a KYC (Know Your Customer) document.

However, before 2018, many or almost all banks and financial institutions into a document made Aadhar Card mandatory in order to open accounts as well as to avail loan facilities with them as per the directives of the Government of India.

The Aadhar Card was sought to be made into an identification document that is similar to the Social Security Card in the United States of America. Therefore, to avail of loans either offline or through the online mode, Aadhar Card was a mandatory document without which, the loan was liable to be rejected.

However, according to the judgment given by the Hon’ble Supreme Court of India, banks may use the Aadhar Card as a KYC (Know Your Customer) only in case the customer consents to its usage. The Reserve Bank of India has also issued such clarification in light of the decision given by the Hon’ble Supreme Court of India.  

However, even though the Aadhar Card is not a mandatory document, it can be said to be a comprehensive document, in that it includes the name, address as well as the fingerprint information of the individual and therefore, the process of verification via the electronic mode is faster and cheaper.

Banks have an E-KYC process where KYC (Know Your Customer) verification has been digitalized. In such a scenario, even though Aadhar Card is not mandatorily required, it does speed up the verification process and enables faster processing of the business loan. Even financial institutions prefer the Aadhar Card for faster verification, whether the loan is sought through the online or offline mode.

In case a loan is sought through the online mode, it is even possible to get an instant business loan online in case Aadhar Card is uploaded as a KYC (Know Your Customer) document as the identity verification can be instantly done, and the KYC (Know Your Customer) process can be instantly completed because the identity of the borrower can be instantly verified through the e-verification process.

Aadhar Card, are mandatory KYC (Know Your Customer) document, it is still the most preferred document in terms of the ease of use and verifiability.