It is a fact that all business start-ups, in the beginning, require some amount of financial strength. In the case of new start-up businesses, the amount of capital that is put in can help to give kick the start of the business into a long-running one with prospects. The most appropriate option is the user can apply for startup India loans to start a business.
Eligibility for a New Business Loan in India
For any startup or company looking to avail the business loan, the eligibility criteria are mentioned below:
- The applicant for the start-up business financing should be above the age of 21 years and should be below the age of 65 years.
- Proof of the individual must be provided in the form of a driver’s license or Aadhaar card.
- Bank statements for the past six months must be procured and presented at the time of loan negotiations.
Documents required for a new business loan
Identity proof: One can present their driving license, passport, PAN card, Voters ID card or even their Aadhaar card.
Income proof: The bank’s financial statement for the last 2 years must be required.
Proof of business ownership: It is compulsory to have documents like a Sole Proprietorship Declaration or a certified true copy of Memorandum and Article of Association to show proof of the business and/ or startup for which the loan is being issued.
Advantages and benefits of taking up startup loans
There are several advantages to avail the start-up loans some of them are listed below:
Convenience: Many people are familiar with their banks and are regular visitors to the branches. This makes bank loans for startup businesses that much more convenient for application.
Interest rate: Bank loans tend to have a lower interest rate in comparison to private equity providers. Plus, the bank loans have the added tax benefits which make it more attractive for taking a new loan for a new business loan in India.
Multiple loan options: Larger banks have specialized loan plans that are intended for small and new startups and businesses. The banks and their loan schemes are only concerned with the loan principal.
Steps for getting a loan to start a new business:
When a business loan for a new start-up business, certain requirements must be fulfilled. These facilitate the process of availing of the new business loan and act as a checklist to see if the bank will suffer a loss if they decide to proceed with the loan or not.
- It is important to get the issuer’s costs and finances in order before proceeding further. Understanding and calculating the startup cost will help you understand the purpose for which the small business start-up loans are being taken.
- Afterwards, the person who is taking the loan must have the related documents and registration forms to legally and officially apply for the loan.
- There are many different start-up business loans to choose from. Depending on the requirements and goals of your startup, one needs to choose the right business loan for a new business.