In India, you can easily start a company by raising funds. As a business owner seeking funds, you may come across a wide range of loan products in the market. A commercial loan is one such financing option. In this article, let us look at what a commercial business loan is, how it works, and what documents are needed to avail of this loan.
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What are commercial loans in
What is a commercial loan?
▹ Business owners use this loan to meet capital
▹ They can also use it to finance operational
Commercial loan features
▹ Has predefined terms and conditions
▹ You need to repay the loan along with interest
over a specific time frame.
Different types of commercial loans
▹ Has a fixed repayment tenure
▹ Can be short-term or long-term
▹ Even if your account shows zero balance, you can
withdraw funds from it
Letter of credit
▹ If you fail to repay the creditor, the financial
institution will pay on your behalf
▹ If you fail to meet your payment commitments,
financial institutions will compensate the creditor's
Collateral-free SME loans
▹ Unsecured loan, suitable for start-ups or SMEs
Construction equipment loans
▹ Secured loan, ideal for businesses wishing to
purchase construction equipment
SME credit cards
▹ Available for village industries, retail traders, etc.
▹ Has a repayment tenure of three to five years
Commercial vehicle loans
▹ Can be used to purchase a vehicle for business
Eligibility criteria for commercial loans
▹ Available to businesses and self-employed
▹ You must have high turnover and consistent
▹ You should have been in your business for at least
▹ You should be an Indian citizen between 21 and 65
Documentation for commercial loans
▹ Application form along with PAN card
▹ Business continuity proof
▹ Income proof
Before taking a commercial loan, research
well about how it works, the options
available, how the loan is approved, and
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Hero Fincorp Limited
09, Basant Lok, Vasant Vihar, New Delhi - 110057
Tel : 18001024145
Email : firstname.lastname@example.org
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