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Starting a new business venture involves a lot of risk. A lot of cash is required in hand because you need to buy everything from purchasing a land, construction, machinery, furniture, or raw material, hiring employees. Sometimes your expenditure may exceed your budget so what do you tackle such situation? The solution is simple apply for a business start up loan.

Before taking up the loan the borrower must finalize whether they want to avail the loan through secured method or unsecured method. Secured option are best are for those who want to get a big amount by placing a collateral. This collateral can be the borrower’s property like home, real estate or any valuable asset. Information about Total Package for Financing Traders from State Bank of Hyderabad is given here

Total Package For Financing Traders (TPFT) from State Bank of Hyderabad
Purpose
To meet the financing needs of all lawful trading activity in goods and services

Eligibility

a) You are an individual, sole proprietorship unit, partnership firm, HUF, or Limited Company.
b) You should be a local resident
c) You must have either sales tax registration or trade/business license/permit issued by a statutory authority/ recognized body

Margin
Working capital @ 20% for loans of less than Rs.100 lakhs
@ 25% (min) for loans of Rs.100 lakhs and above
Term loan @ 25% for loans up to Rs.10 lakhs
@ 33 1/3% for loans above Rs.10 lakhs (Debt equity ratio of 2:1 is to be maintained)

Repayment
Working capital facility to be renewed every 12 months from the date of sanction.
Term loan should be repaid within a period not exceeding 5 years.

Amount of finance
Need-based bank finance will be extended. In the case of commission agents, the borrowing limit not to exceed Rs.25 lakhs

Security
Primary: Hypothecation of stock in trade and receivables

Collateral:
Minimum collateral by way of equitable mortgage of immovable property valued at 75% of the total exposure
For commission agents collaterals should be 150% of the loan amount

Guarantee:
Third party guarantee

Insurance
The stocks should be insured for full value against fire and other risks

Methods of Assessment
Projected turn over method for loans of less than Rs.100 lakhs and projected balance sheet method for loans above Rs.100 lakhs

Processing charges
Rs.250/- for loans up to Rs.2.00 lakhs
Rs.250/- per lakh subject to a maximum of Rs.10.00 lakhs for loans over Rs.2.00 lakhs

Term Loans
Upfront fee @ 10% of the limit

Sources : http://www.sbhyd.com/