Business Loans India | Commercial Loans | Small Business Loans | Business Overdraft | Loan For Entrepreneurs | Loan For Self Employed

New businesses come and go every day and innovation is part of each of those new businesses. Starting a new business takes conviction and guts but it also takes money. So if you have got an innovative idea that you want to see turn into a prosperous business but you don’t have the financing you need then it’s time to explore small business loans to see your idea come to life.

If you are hoping to get your venture off the ground but not only don’t have the cash you need, you also don’t want to put your assets up as collateral, and in these situations, business loans are a great idea. They require you to put up only a small amount of assets as collateral, and for you as the borrower this is a close as it gets to a no risk loan. You can’t ask for much more than that!

When you obtain one of these business loans there generally isn’t any restrictions on how you must use the money within your business. You might use it to buy stock, assets you’ll need like computers, for raw materials, machinery, or put it away to pay for wages at a later date. Whatever you’ll use the money for, the key is that the lender doesn’t restrict you.

SME Medium Term Loans

PURPOSE:

* To augment enterprise’s working capital gap and to help in improvement of current ratio and also for meeting genuine business requirements. The facility will also be available for repayment of secured and unsecured Loans of other banks or institutions, but not for any purpose, which is not related to the enterprises activity.

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%.

* Debt-equity ratio should not be higher than 2.5:1 and average DSCR should be not less than 1.5:1.

* Satisfactory dealings with the Bank for at least Three years.

LOAN AMOUNT:

* Upto 25% of the existing fund based Working capital limits (depending on the Credit Rating), subject to a minimum of Rs. 25 Lakhs and maximum of Rs. 500 Lakhs.

PERIOD:

* Not exceeding –36- months, to be repaid in equal quarterly or half-yearly installments.

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

RATE OF INTEREST:

* 0.5% – 1.0% over the Bank’s BPLR, only for the additional Loan to be granted under the Scheme.

* Prepayment penalty of 1%, if loan is prepaid within -24- months of drawdown.

PROCESSING CHARGES:

* 0.1% of the amount of loan, with a minimum of Rs. 25,000/- and maximum of Rs. 50,000/-.

Sources : http://www.bankofbaroda.com/