Everything About Interest Rate to Tax Deduction Business Loan Explained - Loan Trivia

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Monday, 3 December 2018

Everything About Interest Rate to Tax Deduction Business Loan Explained

If you have been considering a business loan, it may actually be a boon for your organization. These loans come in handy for meeting various requirements from buying equipment/machinery to working capital and also expansion needs of the business. The interest rate of business loan usually vary from one lender to another. The loan amounts start from Rs. 50-75, 000 in some cases and can go up to even Rs. 75 lakh. The loan applications are processed quickly if you take the online application route with minimal documentation. These loans also come with flexible repayment options as offered by some lenders.

Several NBFCs offer unsecured or collateral free business loans which help in meeting financial needs with ease. These loans can be easily repaid through monthly EMIs. The interest rates should be compared for multiple lenders before you choose your lender. You can use an online EMI calculator to work out the amount payable every month. Some lenders also offer pre-approved offers on business loans that you can take advantage of to get special benefits like discounted interest rates and so on.

There are specific eligibility criteria for business loans and these can be applied for by manufacturers, retailers, traders, private limited companies, partnership firms, limited liability partnership entities and other closely held limited companies. Borrowers have to meet the minimum criteria in terms of the turnover and the number of years that they have been in business. They should meet the minimum threshold in term of the ITR, age and company profits/revenues.

Some of the documents needed may include KYC documents, ITR, income statements, profit and loss statements, bank account statements, balance sheets, proof of continuation of the business and so on. All documents should be certified properly by a CA. There should be a declaration copy of the proprietorship/partnership as well. The interest rates usually range between 17-22% for business loans although this is influenced by many factors like credit history, CIBIL score, revenues and so on. Some business loans may have collateral/guarantor requirements too.

Also Read: Everything About Business Loan Explained-Interest Rate to Tax Deduction

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