Business loan is a type of loan given out to meet the needs of a business. These loans may be given out to self employed businessmen, self employed professionals, companies, partnership firms, and any other type of business entity. There are different types of business loans which are used for specific needs of the business.
One important characteristic of business loan is that it is an unsecured loan. It can be used for any business requirement without any pre-existing conditions from the lender. However, some business loan such as those to acquire capital assets may be secured against the asset being purchased. They may also be specific equipment finance loans.
The first step to taking a bank loan for business is to check the eligibility. Most lenders clearly display their eligibility criteria for a business loan on their website. If you meet these eligibility criteria, you can apply for a business loan.
Here are the different business loan eligibility criteria:
1. Age of the applicant:
Most lenders specify the minimum and maximum age of the bank loan for business applicant. In most cases, the minimum age is 21 years and the maximum age is 65 years. The loan applicant should not cross 65 years of age when the loan is outstanding.
2. Turnover of the business:
Each lender has their own minimum turnover guidelines. The business must meet the minimum turnover guidelines to become eligible for a business loan. However, it is to be noted that not all lenders insist on a minimum turnover requirement.
3. Number of years of operation:
A lender may specify a certain minimum number of years that the business has to be in operation to become eligible for a business loan. This may range from 2 years to 5 years depending on the lender.
4. Minimum income requirements:
Lenders also look at the profit that the business has earned over the past 3 to 5 years to ensure that the business is viable. A bank loan for business is only given out to viable businesses that show a profit and have a positive net worth. This is to ensure that the loan will be repaid.
5. City of operation:
Some lenders may lend to businesses based in certain locations. Depending on the location, the loan given may differ. However, this depends from lender to lender.
If you meet the business loan eligibility, you can fill out the loan application form either online or offline and apply for a business loan.
One important characteristic of business loan is that it is an unsecured loan. It can be used for any business requirement without any pre-existing conditions from the lender. However, some business loan such as those to acquire capital assets may be secured against the asset being purchased. They may also be specific equipment finance loans.
The first step to taking a bank loan for business is to check the eligibility. Most lenders clearly display their eligibility criteria for a business loan on their website. If you meet these eligibility criteria, you can apply for a business loan.
Here are the different business loan eligibility criteria:
1. Age of the applicant:
Most lenders specify the minimum and maximum age of the bank loan for business applicant. In most cases, the minimum age is 21 years and the maximum age is 65 years. The loan applicant should not cross 65 years of age when the loan is outstanding.
2. Turnover of the business:
Each lender has their own minimum turnover guidelines. The business must meet the minimum turnover guidelines to become eligible for a business loan. However, it is to be noted that not all lenders insist on a minimum turnover requirement.
3. Number of years of operation:
A lender may specify a certain minimum number of years that the business has to be in operation to become eligible for a business loan. This may range from 2 years to 5 years depending on the lender.
4. Minimum income requirements:
Lenders also look at the profit that the business has earned over the past 3 to 5 years to ensure that the business is viable. A bank loan for business is only given out to viable businesses that show a profit and have a positive net worth. This is to ensure that the loan will be repaid.
5. City of operation:
Some lenders may lend to businesses based in certain locations. Depending on the location, the loan given may differ. However, this depends from lender to lender.
If you meet the business loan eligibility, you can fill out the loan application form either online or offline and apply for a business loan.
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