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Last updated: 27 Sep, 2014  

Rupee.9.Thmb.jpg Types of small business loans

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Kushwaha Singh | 16 Oct, 2012
The feeling of doing something on your own, on your own terms cannot be compared. Like all other good things in life, starting something can be extremely time consuming and tough. Since you are responsible for every little thing you have to make sure you take care of every little detail. The first major hindrance any entrepreneur may come across in money.

Let's find out more about the small business loans available in India. There are many types of business loans in India and the good news is the application process is a lot more streamlined than you think! A loan for any amount is handled by loan officer who is your touch point for the entire process. The different types of small business loans and other loans are given below.

To begin with we have loans that are offered by the government of India. The government of India knows that the strength of the economy lies in new business ventures and ideas. The small business loans offered by the government depend on many factors such as the business plan, repayment schedule and the background of the applicant. There is no upper limit t amount of money that the government can loan to an individual as long as the business is relevant and the candidate is deemed worthy. Small business loans are offered to minorities, elderly people with legitimate business plans etc. Next we have loans offered by banks and other financial institution. Small business loans are given to two categories of working people.

The first being trader, retailers and the other being skilled professionals. Professional small business loans are offered to lawyers, doctors, architects, chartered accountant and other individuals you have been studied or received extensive training in a particular field. In this type of loan the professional offers a service. The loan amount can range from 20,000 to 20, 00,000 and interest rate varies, depending on the bank. The documents that you need for a professional loan are Proof of Identity which can be either be your Passport copy, Voters ID card, Driving License, An address Proof like your ration card or telephone bill, a copy of your bank statements for the last six months, your education qualifications, income tax returns, proof of continuation like a Trade license or Establishment or Sales Tax certificate and other documents like Sole Proprietorship, Partnership Deed etc.

The next types of small business loan are meant especially for traders who want to buy or sell goods. Traders require money for various purposes like purchase of stock and machinery, working capital, importing goods etc. Like a government loans there is no upper limit for a trade loan. Some people borrow in corers! While the documents remain more or less the same as a professional loan some banks may need a security that acts like collateral in case of non repayment. The interest rate, repayment schedule depends on the bank and the customer's profile, earning capacity etc. (Source: Articlesbase)

* Kushwaha Singh is a small businessman, availing services with different banks.
* The views expressed by the author in this article are his/ her own and do not necessarily reflect the views of SME Times. 
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i need a loan to start restaurant
siddharth jain | Sun Mar 1 12:01:08 2015
please tell me how much loan can be provided and upto what intresr rate

Alexander | Sun Sep 28 14:29:14 2014
Dear sir i run a small industries i need a running capital for a loan of at least 1 lakh.

Rahul Agarwal | Wed Jul 16 03:00:23 2014
Dear sir i run a pvt ltd company since June 2012 which deals in veterinary n poultry products here i need loan of Rs 3 lakh to 5 lakh.

Ravi | Wed Jan 15 03:15:45 2014
I want to start my busyness.For that i need loan of about 1.5 lack.

iqbal ansari | Sat Sep 14 06:55:06 2013
irequired for small business a shop 10 lacs rupees imediate

General Article
Chetan Shukla | Fri Nov 2 11:46:44 2012
I do not think such vague and general articles should be put up.

loan for business
RAJESH KUMAR | Fri Nov 2 05:59:23 2012

What is the value addition of this article???
Srini | Thu Nov 1 14:38:58 2012
Sir, it would be beneficial for all of us who take the time to read through your article if there was some useful information to act upon. You have basically summarized an existing fact!!

loan needed
ramesh jain | Thu Nov 1 08:11:31 2012
i am doing small business in manufacturing spices, now i require 50 lacks to expand my business.

Loan needed
Ble | Tue Oct 30 15:27:20 2012
So you give loans from companies from europe?

Your article
danke | Thu Oct 25 10:32:28 2012
No idea whatsoever given about interest rates

small besiness loan
JAYARAJ | Thu Oct 25 07:11:12 2012

small business loans
anand jain | Thu Oct 25 03:58:45 2012
I want small business loans for shop 1500000/-

RE: Funding Solutions
Andt | Tue Oct 23 17:27:02 2012
it is all in paper. Paper tigers won't bit. 

RAVINDER RAJ | Tue Oct 23 15:56:55 2012
I want to establish a new company for manufacturing EXERCISE NOTE BOOKS MANUFACTURING.Loan required of Rs80 lakhs can I get with out COLLATERAL from any BANK.

Loan Required
Deevendra | Thu Oct 18 16:38:24 2012
I am doing small business so to grow my business i required Loan

  Re: Loan Required
Rosa Johnson | Wed Oct 24 14:39:24 2012
 I need a small business loan. I am a retailer. Please give me information where to start.

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