Indian banks provide loans for establish, renovate and expanding of business. These type of loans are known as business loans or commercial loans. As the name suggests, these kind of loans are provided to firms and corporations to meet their swap existing high cost debt from other financial institutions, acquisition of fixed assets, capital expenditure, or expanding their business or industrial unit. Indian banks provide maximum Rs.25 lakhs as loan for business and the maximum tenure they give is five years.
Business loans are broadly categorised into two types. They can be secured and unsecured. Secured loan for business are those in which the entrepreneurs have to keep something as security while taking the loan amount. This security can be anything, this can be raw materials, land and building of the office or industry, machinery equipments etc. On the other hand, there is unsecured business loan. In this kind of loans there is no security or security is required. It is generally provided relatively at higher interest rate and for a smaller tenure.
Business loan also can discussed in terms of tenure period. There are short-term, intermediate and long-term business loans are provided by Indian banks. The short-term loans usually are taken for short-term working capital for a business which have a temporarily need of money. This kind of loans are taken for some short-term financial problem and for seasonal fluctuation. These loans are to be repay within one year.
The intermediate loans are provided to those people who wants to start their new business. This kind of loans are also provided to purchase a new equipment, increasing of working capital and built an inventory. On the other hand, the long-term loans are provided to the established business owners who wants to expand their business. These loans are also provided for purchasing a new building or for long-term working capitals to entrepreneur who wants to start-up their new business. These kind of loans have to be repay within three to five years.
From the point of providers, the business loans are categorised into two types. There is trade loan and professional loan. Indian banks provide professional loans to the self-employed professionals like Charted Accountants, Company Secretaries, Architects, Lawyers, Doctors etc. This kind of loans are unsecured in nature.
Under the professional loans the maximum amount is depends on the repayment capacity of the applier, the financial standing position of the applier, tenure of loan etc. Generally Indian banks provide Rs. 25000 to Rs. 25 lakhs under this kind of loan category. These loans are also provided in a lucrative interest rate and this is charge according to the prime lending rate.
On the other side, the
trade loans are given to the business persons and the traders for establish or expand their business. Under this category the minimum amount given by the Indian banks is Rs.25000 and the maximum amount can be Rs.100 lakhs. Like the professional loans, under this type of loans the loan amount depends on the financial standing of the applicant, repayment capacity of the applicant and the tenure of the loan. These loans are to be repaid within five years.
There are lots of banks in India, both government owned and non-government, who provide
loan for business. Some of the top choices are State Bank of India, United Bank of India, Union Bank of India, Standard Chartered, Bank of Baroda, HDFC Bank etc.
