Tax Benefit
Upto Rs. 46800
Tax Benefit
Upto Rs. 46800
Tax Benefit
Upto Rs. 46800
Getting a business loan can be difficult. You may not know where to begin, which kind of business loan will be best for you, and how to take a business loan. In this article, we will help you understand business loans basics and how to take them work for you in Maharashtra.
Upto Rs. 46800
Upto Rs. 46800
Upto Rs. 46800
Maharashtra is a unique state in terms of its geography and business dynamics. It is home to billionaires, big industrialists and many startups such as Apna, Reliance Jio, Upgrad, and many more. If you want your business to be known domestically as well as globally you may require a business loan.
Getting a business loan can be difficult. You may not know where to begin, which kind of business loan will be best for you, and how to take a business loan. In this article, we will help you understand business loans basics and how to take them work for you in Maharashtra.
Let’s learn a little bit about Maharashtra and what it has to offer in terms of business opportunities.
Maharashtra is located in the central part of India. Mumbai City is its capital. Maharashtra is surrounded by states of Gujarat, Telangana, Madhya Pradesh, Karnataka, Chhattisgarh, and Goa. Among all the Indian states, Maharashtra leads in industrial and agricultural production, education, and transport. Its capital city, Mumbai, is the home of Bollywood.
In terms of business, Maharshthra is a blooming state with Mumbai known as the “Financial capital of India”. Another state of Maharashtra, Pune is emerging as an educational hub. The state is famous for its production of jeeps, three-wheelers, cars, cold-rolled products, and industrial alcohol. The Maharashtra’s government has also founded Maharashtra Industrial Development Corporation (MIDC) that aims to provide infrastructure like roads, land, land, drainage facilities, etc. to businesses. In the agricultural sector, Maharashtra is the main producer of rice, sugarcane, oilseeds, etc.
Loans are an important part of business. There are multiple ways to generate funds like from banks, NBFC or crowdfunding.
But timing is also important in taking a business loan as you have to pay back the loan amount and if you are not making reasonable profits then it may become difficult to do so.
You may require business loan for the following reasons:
To pay the due bills: It is okay for unpaid bills to rack up in the course of business. But a business loan can certainly help you come out of that difficult situation and pay some of the bills so as to not affect the daily business.
To hire new employees: A business loan will help you attract talented individuals to your company that will ultimately help you grow your business.
To improve your hardware: As your business grows, you may need to either change or buy new hardware. Additionally, you can sell the old machinery to earn at least something.
To expand your business: When you run out of space for your business and it starts to affect your efficiency then maybe it’s time for expansion. You can use a business loan to move into a new location.
As we learned, business loans can be very helpful to grow your business. Here are some of the reason why you should take a business loan in Maharashtra:
To open an acting school: Bollywood and Maharashtra are almost synonyms. Owing to its popularity, you can open up an acting school. An acting school will also help upcoming actors to find their ways in the industry.
To open a recycling business: E-waste and garbage poses a serious threat to the environment and with Maharashtra large-scale industries this has become a major problem. Opening a recycling business can not only be profitable but you will also be helping the environment.
To open a bar lounge: A lounge or a restaurant is very attractive to people, especially youths. With a business loan you can build a unique looking bar lounge that is appealing to the people.
To open a Import-export business: with Maharashtra being so attractive to domestic as well as foreign firms, opening a import-export business can be very beneficial. Your business can focus on many things such as fruits and vegetables, electronic products, materials like copper, leather goods, etc.
To open a travel agency: Maharashtra is home to many famous monuments like, Marina drive, Gateway of India, Ajanta cave, etc.
Now that you know the reason why taking a business loan can be beneficial, you need to determine which kind of business loan you will require. Every type of business loan is created for a different purpose. Given below are some kinds of business loans you can get:
Start-up loan: As the name suggests, this kind of business loan can be perfect to grow your business. Here, the applicants may not have the best credit history so their personal credit history will be considered by the lender.
Equipment financing: If you have a manufacturing business then this type of loan will be suitable for you. Here, equipment is taken as security against the loan.
Term loan: If your business generates steady income then this type of loan will be suitable for you. Here, the loan amount is repaid over a specified period.
Invoice financing: This type of loan is given against the amount raised in the invoice of the business.
The government also offers various kinds of business loans for startups as given below:
Pradhan Mantri Mudra Yojana (PMMY): This scheme was introduced in 2015 and its main purpose is to provide loans to manufacturing, service, and trading activities.
Standup India: Standup India was introduced in 2016. You can take loans ranging from Rs. 10 lakh to 1 crore.
Credit Guarantee Scheme (CGS): This loan can be taken by both new and current industries and up to Rs. 2 crore can be taken as a loan amount under this scheme.
Bank Credit Facilitation Scheme: National Small Industries Corporation (NSIC) governs this scheme. This scheme aims to provide business loans to MSME units.
Both banks and NBFCs offer business loans. Every bank offers business loans at different interest rates. Here is the list of banks & NBFCs you can approach for a business loan.
HDFC bank Ltd is among the leading banks in terms of market value. They provide various services that include retail banking, auto loans, personal loans, wholesale banking and loans against properties.
Key highlights of HDFC bank
ICICI bank is a multinational bank that offers a range of services to its customers that includes, mortgage loan, corporate and consumer banking, wealth management, term loans, Insta OD, and GST business loan.
Key highlights of ICICI bank
Axis bank is a leading private sector bank in terms of assets and market value. They offer business loans to new and existing businesses, retail business, SMEs, MSMEs, with short and long term options.
Key highlights of Axis bank
The Bank of Maharashtra comes under the ministry of finance. This is one of the largest banks in Maharashtra. This bank offers personal banking services, deposits, loans to MSME, corporates, and NRI customers.
Key highlights of Bank of Maharashtra
Kotak Mahindra bank offers services like Life insurance, investment banking, Kotak Realty Fund, Kotak Private Equity, Mutual funds, Securities, Wealth management, and Car finance.
Key highlights of Kotak mahindra bank
Yes Bank is the 6th largest bank in India. They provide services like Loans, debt capital markets, digital banking, Yes corporate credit card, Yes MSME loans, and investment banking solutions.
Key highlights of Yes bank
IndusInd bank is a new-gen private sector bank. The services they offer include retail banking, electronic banking, transactional and commercial lending, consumer finance, and investment banking.
Key highlights of IndusInd Bank
Muthoot Finance is the biggest gold loan NBFC in India. If you have gold jewellery or gold products then you can use it to take a loan from this NBFC. They offer business loans to SME, individuals, public and private limited companies, and MSMEs.
Key highlights of Muthoot Finance
Bajaj Finserv is among the leading NBFC in India. The main focus of Bajaj Finserv are lending, wealth management, and insurance. In terms of business loan, they provide Start-up business loan, MSME loans, working capital loan, and Flexi loans.This is a very famous NBFC that you may have heard of and is another good option to get a business loan from.
Key highlights of Bajaj Finserv
HDB financial services offers like business loans, Vehicle loans, Auto loans, loans against properties, Gold loans, and personal loans.
Key highlights of HDB financial services
Now that you know the highlights of the banks and NBFCs, let us learn about the conditions to be eligible for a loan. The conditions required by a particular bank may differ from other banks.
These are some general conditions.
If you fall the above mentioned criteria, then here are the documents that are needed to take a business loan. But, some lenders may ask for other documents.
For self employed people that include Partnership firm and private Ltd. Co, you need to furnish Sales tax, Service tax, VAT, Excise registration, Water, IT return of the concern, PAN ID, Registration under Shops and Establishment Act, Memorandum and Articles of Association, Municipal tax and Electricity bill as identity proof.
For the identity proof of sole proprietorship, you need PAN ID or IT return of the concerned person, Electricity or water bill of the concerned person, or Municipal tax.
For non-professional self-employed individuals, you need an ITR of 3 years, identification proof of sole proprietorship. Identity proof of the individual, past three years of sale tax returns, and the duplicate of the bank statement of the term loan.
The process to apply for a business loan is very simple nowadays. Mentioned below are the steps for taking a business loan online.
The typical maximum loan amount is Rs. 40,00,00, and the minimum loan amount is Rs. 100,000. Higher loan amounts are subject to the borrower’s needs; the bank will finalise the loan amount.
Borrowing entity’s PAN card, address proof, last 2 years audit report, VAT, partnership deed, last 6 months bank statement, service tax returns, MOA, existing loans repayment track record. Additionally, the partner or director’s PAN Card, KYC, ITRs, own house proof, etc.
Any interest levied on any business loan is exempt from taxation. The interest paid is considered a business expense, not revenue. Registering as an MSME can also help you avail of business loan tax benefits on excise and other charges.
However, the principal amount is not tax-deductible.
Yes, you can get a Business Loan without any collateral or security.
Interest rates are the charges that banks or other lenders charge for the use of their money. Interest rates are typically higher for large loans than for small ones. Interest rates can be thought of as a price to borrow money.
A business loan can give you access to capital expenditure, growth and acquiring new commercial assets.
It will firstly impact both applicant and the guarantor’s CIBIL score, which will lead to the rejection of your future loans. In addition, non-payment of two consecutive EMIs will put you on the defaulter list, and in extreme cases, the lender can sell your assets too.
Startups can avail business loans upto Rs. 45,00,000.
MSME loans in 59 minutes, MUDRA loans, Stand Up India, Coir Udyami Yojana are some of the government loan schemes for startups.
However, the principal amount is not tax-deductible.
Loans can be repaid through EMIs, PDCs, Electronic Clearance Service (ECS) or Debit.