Business Loans India : Information about SME Short Term Loans From Bank Of Baroda
Short term business loans are designed to help individual borrower who are not having the right kind of finances to start or finances their business concerns. Thats why lenders keeping the financial conditions of the individuals in mind offer monetary assistance. Basically the amount derived under these loans can be used to immediate sort out the needs like upgrading the machinery, procuring raw materials, stationery items, paying off existing debts, making payments to the workers etc.
Lenders approve the loan amount only after checking the credentials of the borrower. So a borrower must be ready with documents like bank statements, type of business and services offered, annual profit, revenue papers etc. after only verifying these. Lenders will sanction the loan amount.
As the loans are approved for a short term period for commercial purpose, interest rate levied by the lenders will be slightly higher. This is done to cover the risk element involved with the loans. However a quick search of the online market will enable the borrower to find lenders offering competitive rates.
While availing short term business loans, borrower should keep in mind that these loans are only meant to help the business on a part time basis. He should not rely on this loan to meet every business needs. He should also ensure that these kinds of situations should not occur any more. While opting for the loans, he should first understand the terms and conditions and then he should select a deal.Information about SME short term Loans is given here.
SME Short Term Loans From Bank Of Baroda
PURPOSE:
* To meet temporary shortfall / mismatch in liquidity, for meeting genuine business requirements only.
ENTERPRISES GROUP:
* Small and Medium-sized corporates, business and Trading houses (including partnership firms).
ELIGIBILITY CRITERIA
* Satisfactory credit rating for the last three years
* Latest Balance Sheet etc. should be available.
* Satisfactory financial performance in terms of sales / turnover and profits. Negative variance, if any, should not be more than 10%.
* Satisfactory dealings with the Bank for at least five years.
LOAN AMOUNT:
* Upto 25% of the existing Fund based Working capital limits (depending on the Credit Rating), subject to a minimum of Rs. 10 Lakhs and maximum of Rs. 250 Lakhs.
PERIOD:
* Not exceeding 180 days – minimum 90 days
SECURITY
* First charge / Equitable mortgage of fixed assets of the company / firm or extension of existing first charge / equitable mortgage of fixed assets, ensuring that there is a minimum asset cover of 1.50.
* Extension of Charge on current assets for the additional facility ensuring that adequate drawing power is available.
* Extension of all existing guarantees of Directors / Third party guarantees to cover the additional facility.
RATE OF INTEREST:
* 0.5% below the existing rate on working capital limits
PROCESSING CHARGES:
* 0.1% of the amount of loan, with a minimum of Rs. 10,000/- and maximum of Rs. 25,000/-.Sources : http://www.bankofbaroda.com/