Overview
A business loan is financing provided by banks and other financial institutions to establishments of all sizes. Financing of this sort usually comes with some fees and surcharges. These loans are sought for many reasons, including securing day-to-day expenses, expanding businesses, upgrading technologies, and many others.
India’s SME sector continues to be largely dependent on banks and NBFCs for financing. This type of loan is designed to assist in the growth and development of any company, as well as to fund operational expenses and so on. Furthermore, business loans may also be an effective way for a business to support crucial aspects of its operations.
Businesses can now take advantage of tailored loans designed to fit the needs of start-ups and emerging businesses. It can flourish thanks to these loans, and as a result, gain a distinct advantage that is essential for staying competitive in the modern economy.
Let us begin by defining what a business loan is. A business loan is financing provided by banks and other financial institutions to establishments of all sizes. Financing of this sort usually comes with some fees and surcharges. These loans are sought for many reasons, including securing day-to-day expenses, expanding businesses, upgrading technologies, and many others.
You must pay careful attention to countless factors prior to the application. Be it the participants involved in the agreement, the paperwork, the risk associated with it and what it can cost. In the following section, we will discuss their criteria for consideration including the maximum loan amount offered by Axis Bank, the rate of interest, eligibility criteria, the paperwork involved and the FAQs. We will elaborate more on each point in the following section.
Highlights:
| Business vintage | 3 years at the least |
| Age | Applicants must be 21 years of age or older when applying for a loanWhen the loan term ends, the maximum age should be 65 |
| Turnover | 30 Lacs |
| Minimum income | Individuals must have a minimum income of 2.5 lakhs based on their last two years’ tax returnsIn case of corporate entities, the last two years’ cash profit should be at least Rs 3 lakhs |
| Residence/office stability | Owning either an office or a residential property is idealIf residing in rented accommodation, at least one year of residence stability is required, this requirement does not apply if moving into an owned homeIt is ideal for the office to be in operation for a minimum of 24 months. |
Features of Axis Bank Business Loan
You can borrow up to ₹ 75 Lacs (unsecured loans):
Their business loans range from ₹ 50,000 to ₹ 75 Lacs for small and medium-sized businesses that qualify. You can take advantage of their larger loan portfolio to maximize the likelihood of obtaining funding and advancing your organization.
Credit is not secured by collateral:
Axis Bank offers secured and unsecured business loans to meet your requirements. In the event you decide to take out an unsecured loan there is no collateral or security necessary.
Timely turnaround and prompt payments:
Monitoring mechanisms and process improvements are periodically used to evaluate their TAT (turnaround time). Compared to other lenders, you can get a business loan through their online application within 2-3 business days.
Low rates of interest:
Business loans at Axis Bank are determined using a combination of data collection analytics and algorithms on an individual basis. Therefore, their interest rates are the most competitive.
Extended Loan Tenure:
Offers substantial credit relief to your business over the course of 6 months and up to a maximum of 36 months. For short-term business problems, it may be a suitable solution. As an emergency measure, you can give your organization the cushion it needs by getting a business loan that has long tenure loans.
No Hidden Costs:
There are no additional supplemental charges with Axis Bank. In addition to interest, there is only a single processing fee of 2-3% on your borrowed amount. You will thereby keep a larger amount for your business.
Flexible Repayments:
The EMIs can be paid monthly or every two weeks for business loans. Their repayment plans can be adjusted according to your billing and sales patterns. The repayment period can be set according to your budget and repay at your discretion.
Ease of application:
Get fast, simple loan processing by visiting a branch near you or applying online. Once eligibility criteria are met, minimal documentation is required, and approval is swift.
Read More: L&T Finance Holdings Ltd Business/SME Loan
Benefits
There are several banks that can help you capitalize on today’s rapidly advancing working environment. In particular, business loans from Axis Bank offer the following benefits.
Rapid processing of business loans
They have minimized the time it takes to process loans with their Online Loan Application process. Thus, reducing manual work and providing same-day approval for loans.
Stabilizing cash flow
Ensure smooth operation of your company by getting a business loan. Whilst running your business, you may find yourself short of cash on occasions. There can be sudden requirement of funds like tending to equipment failures, immediate payments to service providers, and such. These temporary setbacks can be managed with the help of a Business Loan.
Improve your credit score
Businesses experiencing a credit score decline resulting from sudden monetary crisis may find business loans particularly useful. By paying Axis Bank’s business loans on schedule, you can give your credit score a boost. Payment on time results in a better credit score.
Required paperwork
Identity proof: A copy of the voter’s identity card / Passport / Copy of the Aadhar card/ Copy of the DL/Ration Card / Telephone bill / Electricity Bill / Passport / Lease agreement/ Sales Tax Certificate.
Income Proof: A statement of your bank account from the last six months
- Completed and signed application form by the applicant/ Form 60
Documents pertinent to the financial business: Last 2 Years ITR with calculated Balance sheet/ income profit and loss account details.
Business Proof: Sole Proprietorship Declaration, Certified true copy of Memorandum and AoA.
Interest Rates
| Categories | Fees |
| An interest rate of | In the range of 14.25% to 18.50% per annum |
| Fees for loan processing | Up to 2.00% plus applicable taxes |
| Prepayment charges for part of the payment | In addition to the 2% charge, GST is also applied to prepaid amounts. |
| Penalties in case of non-payment of dues | 2.00% per month on the balance. on the overdue installment |
| Charges resulting from foreclosure | After the first EMI is repaid:· until 24 months – 4% of the remaining balance upon prepayment on top of the applicable tax·· 25-36 months – 3% of the remaining balance upon prepayment on top of the applicable tax··· > 36 months – 2% of the remaining balance upon prepayment on top of the applicable tax |
| Charges for bounced checks | Rs. 339/- for each failed transaction plus taxes |
| Duties associated with stamps | As per the law of the state |
| Duplicate No Due Certifications/NOCs | Rs. 50/- plus taxes |
Read More: How to get Business Loan in Punjab National Bank (PNB) Business Loan ?
Axis Bank offers a variety of business loans
Axis Bank extends tailored financial solutions to small and medium-sized businesses in India. Their financing is streamlined to avoid the unnecessary complexity that typically comes with traditional bank loans. Applications, consents, and pay-outs are all very straightforward.
There are both secured and unsecured business loans available through Axis Bank. It also provides funds to professionals and self-employed individuals. There is no collateral requirement when taking out an unsecured loan. On the other hand, obtaining secured loans requires you to submit an agreed-upon asset guarantee (most commonly real estate and investments).
The secured Loan amount ranges from ₹ 5 Lacs to ₹ 10 crores on an average for tenure starting from 12 months to 15 years, whereas the maximum loan amount without collateral is ₹ 75 Lacs. The bank provides competitive interest rates, flexible repayment terms, and additional assistance on loan accounts.
Summary
In order to fund start-up expenses or expand, businesses must have access to sufficient capital. Because of this, companies seek out business loans in order to obtain the finance they need. Applicants are required to repay such loans according to the terms and conditions set forth at the time of application.
Entrepreneurs and business owners must be aware of their financing options and fully comprehend how a loan works, what it entails, and what they must do as a result. A loan appraisal basically ensures that the borrower is able to make the most of the funds and the lender is able to make a profit.
To know more details on SME loans from Axis Bank, you can email [email protected] or call at +918886666821.
FAQ’s
Who can get a loan to finance their business?
- Individual (having a registered business)
- A firm that operates as a proprietorship
- Partnership
- Partnerships with limited liability
- Pvt ltd Companies
- Non-listed Public Limited Corporations
- Foundations & Societies (mainly for educational institutions & healthcare)
Approximately what is the interest rate on the Loan Facility?
Competitive interest rates are available for business loans. A personalized interest rate is determined by analysing your business profile, financial assessment, past performance, amount of the required funds as well as loan repayment period.
Can I still apply for small business loans if my operation is new?
Unfortunately, No. You must be the owner of the business for at least 3 years in order to qualify for Axis Bank financing.
What are the uses of business loans?
The following are a few reasons why you may wish to take advantage of these services:
- Invest in a new office space
A well-maintained office can speak volumes about the business owner. These are after all the first impressions of the business. The office is where you conduct most of your business transactions, such as entertaining your clients and interacting with them Business loans can be put to good use for remodelling your workplace, upgrading your office furnishings, replacing your old equipment, and so on.
- Business expansion
Business growth is a gradual process. Expanding a business requires significant resources. That’s where a business loan can make a difference. Make a smart investment in your company through a Business Loan and reap the benefits.
- Stock up on your supplies
An effective business relies on preparation. Making certain operations are uninterrupted and avoiding shortages is crucial. Keeping inventory levels up can prove challenging economically. Having these funds available at your fingertips means you’ll always have funds available should you need them.
How does Axis Bank initiate a business loan application?
- Forms can be accessed from the bank’s site at axisbank.com and submitted at any of the bank’s branches.
- Alternatively, applications can be filled out at the nearest branch by visiting the branch.
- In addition, you can submit an application online instantly. https://dlpoffers.axisbank.co.in/AXIS_SME/loginPage?ChannelID=WEB&utm_source=businessloans&utm_medium=websiteofflineprdpg
Is getting a business loan difficult?
Making preparations in advance should help prevent unnecessary hurdles in the application process. Your only obligation is to ensure that your financial records are thorough and accurate. Provide them with assurances that you will be able to keep the necessary reserves and that your debt repayment capabilities are reliable. Those assurances have to be sufficiently convincing for the lending institution.
What is the typical timeframe for a business loan to be repaid?
In accordance with the loan terms, the duration will vary. A pre-determined loan duration is usually established upon loan approval. When you have access to funds and want to prepay the debt, then that is great. Prepaying does not require waiting until the end of the term. There is, however, a prepayment charge of around 2 percent for Axis Bank.
Does pre-closing differ from part-prepayment?
The customer wishes to pay off the entire outstanding loan amount at once, which is known as pre-closure. As opposed to part payments, customers who wish to repay a fraction of their outstanding amount.
What happens if I miss out on my EMI payment or if there is Cheque is bounced?
If something like this happens then an ECS bounce charges/penalties could be levied by the bank. In addition, your credit report will be impacted. You can suffer serious financial impact if you fail to make payments, including not being able to obtain a mortgage or a car loan afterwards. The financial institutions may pursue legal action.
In the case of a loan against property application, what is the TAT (turnaround time)?
Upon receiving all the required documents, Axis Bank will render a response confirming the approval or rejection of the loan within 30 days. Following the submission of requisite documentation to the bank for evaluation, a 30-day evaluation period begins.
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