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Before you approach business loan providers in Chennai, you should have a clear understanding of the various types of business loans available. There are several types of loans tailored to suit different business needs. Here’s a closer look:
1. Business Loans for Startups: Tailored specifically for new businesses, these loans provide the much-needed capital for entrepreneurs to kick-start their ventures. They often come with flexible repayment options, considering the unique challenges startups face in their initial days.
2. Business Loans for Women: Recognising the rising tide of women entrepreneurs, certain financial institutions offer loans designed exclusively for business women. They may come with reduced interest rates or special benefits to encourage women in the business arena.
3. SME/MSME Loan: Small and Medium Enterprises (SMEs) form the backbone of many economies. To support these businesses, SME/MSME loans are designed to address their specific financial needs, ensuring their sustained growth and expansion.
4. Working Capital Loan: This loan type addresses the immediate financial requirements of a business, aiding them in maintaining their day-to-day operations. It’s a short-term loan, ensuring businesses always have liquidity.
5. Machinery Loan: For businesses in manufacturing or production, the right machinery can drastically enhance productivity. Machinery loans help enterprises finance the purchase of new equipment or upgrade existing ones.
6. Business Loans for Specific Professions: Certain professions like doctors, chartered accountants, and manufacturers have tailored loans. These are curated considering the unique needs and challenges faced by professionals in these sectors.
7. Business Loans for Shops: Retailers and shop owners can benefit from this loan type to expand their premises, stock up on inventory, or introduce new product lines.
When you’re seeking an online loan for business in India, you might naturally gravitate towards traditional banks. However, NBFCs can offer several advantages you shouldn’t overlook:
1. Flexibility: Non-Banking Financial Company’s often have more adaptable operations, enabling them to craft loan products tailored to your unique needs, which banks might not accommodate.
2. Simplified Process: If you’re in a hurry, consider Non-Banking Financial Company’s. Their documentation is typically less demanding, and they usually process loan approvals quicker than most banks.
3. Friendly to Lower Credit Scores: While a high CIBIL score might be a strict criterion for banks, many Non-Banking Financial Company’s are more lenient. If your score is less than perfect, Non-Banking Financial Company’s could be your financial ally.
4. Innovative Offerings: Beyond the traditional, Non-Banking Financial Company’s offer innovative financial solutions, catering to specific needs that banks may not address, including niche online loans for businesses in India.
5. Personalised Service: At an Non-Banking Financial Company, you’re likely to experience more personalized customer care. They value your business and address your concerns more promptly.
State Bank of India (SBI) is set to boost the MSME sector by increasing the threshold limit under its “instant loan scheme” from the current Rs 5 crore, aiming to improve credit access for MSMEs. Through its digital platform ‘MSME Sahaj – End to End Digital Invoice Financing’, SBI offers a seamless loan application, documentation, and disbursement process that takes as little as 15 minutes, relying on automated, data-based assessments without manual intervention.
SBI’s approach leverages a business rule engine and data-driven credit assessments, where MSME clients need only provide their PAN and GST authorization. This streamlined process enables loan approvals within 15-45 minutes, as highlighted by SBI Chairman C S Setty.
The initiative also shifts lending criteria from collateral-based to cash flow-based assessments, backed by the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE). This reduces collateral requirements, promoting broader inclusion for MSMEs in the formal credit system.
In line with these digital innovations, SBI plans to expand its footprint with 600 new branches this fiscal year, adding to its current network of 22,542 branches, 65,000 ATMs, and 85,000 business correspondents. Serving approximately 50 crore customers, SBI aims to strengthen its position as a trusted financial partner for Indian households and businesses alike, with Setty expressing his commitment to making SBI the most valued bank for shareholders and stakeholders across India.
When approaching business loan providers, preparation is key. Understanding the different types of business loans, evaluating loan terms, maintaining a healthy credit score, and having all the necessary documents are crucial steps in the loan application process.
Lastly, don’t shy away from exploring online loans or NBFCs, as they can offer competitive terms and a more straightforward application process.
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