InvestorQ : What are the main features of business or SME loans?
Swapnil Sarang made post

What are the main features of business or SME loans?

simran Kaur answered.
3 years ago

Business loans are the loans a businessman/woman can avail of to continue his/her company’s functioning and fund future plans. This loan comes in handy when you wish to expand your business in new areas, or add some instruments to your unit, or hire more experienced employees.

A business loan is an unsecured loan which means that you don’t have to provide the lender with any collateral or pledge any asset in exchange of the loan amount.

A few features of business loans are:

- They can be availed for as small an amount as Rs. 30,000. Larger amounts, too, can be availed depending on various factors including the size of the business, reported profits of the business, existing business liabilities, etc.

- Business loans are offered similar to personal loans. Therefore, the documentation to avail a business loan is simple and the turnaround time is relatively short.

- The tenure of a business loan can be from 12 months to 48 months. In most cases, the borrower can also avail the benefit of prepayment, although at a nominal prepayment charge, which helps provide additional flexibility to the borrower.

- Business loan interest rates vary from 17% to 25%. The interest rates depend on various factors including, but not limited to eligibility of the applicant, the size of your business, credit rating/score of applicant, type of business and loan quantum/tenure.

(Rates as on July 24, 2018)