Secured business loan is a
financial model where funds are acquired by pledging property as collateral.
Funds are obtained as per the property value, known as the loan-to-value ratio
(LTV ratio).
Business loans can be obtained from NBFCs for various business requirements. The ways for acquiring a secured business loan are as follows:
Know the eligibility criteria before applying for a secured business loan
For self-employed professionals and non-professionals:
● Should be at least 25- 70 years of age.
● The organisation must be operational with a regular source of income.
For salaried individuals:
● The individual’s age must be between 33 years to 58 years.
● Should be an Indian resident.
● Individuals must be employed with an MNC, a private company or the public sector
Be familiar with the required list of documents
For self-employed professionals and non-professionals:
●
Application Form
●
PAN card
●
Identity proof: Driving License/Passport/Voter’s
ID/ Aadhar card
●
Address proof: proof for both office and
residence; Passport/Driving License/ Voter’s ID/ bank statement
●
Proof of Ownership: Electricity bill/Municipal
tax bill/Agreement copy/Share certificate
●
Business continuity proof: GST
registrations/Service tax/tax registrations – VAT
●
Firm constitution: AOA/Partnership Deed/GST
registration certificate/Form 32
●
Audited financials for the last three years
●
Tax Audit Report for the previous three years
●
Recent VAT or GST returns of the current
financial year.
●
Breakup of all loans – secured and unsecured.
●
List of Directors and shareholding pattern to
date
●
Existing loan sanction letters and their
corresponding EMI reflecting bank statement for last one year
●
Account statement of the past one year (Business
Accounts)
For salaried customers:
●
Application Form: For salaried individuals
●
Compulsory document: PAN card
●
Identity proof: Driving License/Aadhaar
card/Voter’s ID
●
Address Proof: Proof for both office and
residence; driving license/utility bill/bank statement/bank account passbook
●
Proof of Ownership: Agreement copy/electricity
bill/maintenance bill with share certificate/municipal tax bill/share
certificate
●
Salary slips of last three months
●
Latest Form 16
●
Employment Proof (Appointment Proof)
- Know
the features of loan against property
●
High-value
loans made affordable: Salaried individuals get a high loan amount,
based on the value of the mortgaged property
●
Disbursal in
4-days: Minimal documentation and doorstep service makes the loan
application process a hassle-free one.
●
Online account
management: Access loan details anytime and anywhere via a customer
portal
These are the standard
eligibility criteria and might differ from lender to lender. While the secured business loan interest
rate is more favourable than unsecured options, few companies have a
valuable asset to collateralise when in need of funds. Thus, a standard
business loan is also a valid option for smaller businesses, which do not own
any immovable properties.
Why consider unsecured business credit?
Following are some reasons
why unsecured credit can benefit businesses –
●
No need for
collateral – As previously mentioned, unsecured business loans are
perfect for smaller firms, which lack any valuable asset to pledge.
●
Quick approval
times – Unsecured loans’ application process is simpler to handle since
minimal formalities are involved. Also, any individual with a proper credit
rating and business vintage can acquire such funds, minimising hassle
significantly.
●
Minimal
documentation – Borrower’s KYC and identification documents, along with a
business’s financial ledgers are all of the documents required for an unsecured
business loan. This simplifies the prospect of
availing of a loan further.
Pre-existing customers of
Bajaj Finserv can reduce hassle and accelerating the lending process by taking
advantage of pre-approved offers. These offers are provided on various
financial products like business loan, personal loans and more. You can check
your pre-approved offer by providing a few details such as your name and
contact number.
A secured business loan can be a highly beneficial option if you are willing to grow your business. Individuals can acquire all the required information as to how to get a secured business loan. Nevertheless, in some cases, unsecured credit is the wiser option, allowing for increased flexibility.