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Personal Loan - Documents Required & Eligibility

Check this step-by-step guide to make your business loan application process seamless!

A company can get the funds required for various financial requirements by borrowing a business loan.

How Can a Business Loan Benefit Your Business?

Several lenders offer business loans so enterprises can obtain funds to maintain their cash flow. While a personal loan can be put to use for multiple purposes, a business loan is primarily used for dealing with company expenses. A business loan can support the smooth operation of various business activities and boost profitability.

For instance, the funds can be used to hire new talents or to shift to a larger office space. A business loan can also be valuable for a company's international expansion. This article explores in detail the myriad benefits of taking a business loan.

  • High Flexibility

    Business owners are allowed to apply for different types of business loans as per their requirements. A business owner can opt for both long and short-term loans. They can choose the tenure as per the amount. While short-term loans of one year are common, business owners can also opt for loans of five years or longer.

  • Affordable Interest Rates

    The competitive interest rate is one of the major business loan benefits. The tenure of the business loan has a huge impact on the interest rate

    Creditworthiness and collateral also affect the interest rates of business loans. Therefore, the interest rate of business loans for one borrower might not be the same for another. Moreover, business loans are also offered with nominal processing fees.

  • Liability-Free

    Applying for a business loan does not necessarily require you to have collateral. Business loan requirements also don't specify any particular income level. It ensures that even small businesses can apply for a loan and obtain it.

  • Increase Business Loan Limit

    Acquiring a loan will also help you establish the credibility of your business. Repaying a business loan within the stipulated period will make you eligible for higher limits for future credits. If your business ever needs it in the future, then it will also be eligible for large-scale financing.

  • No Profit Sharing

    Working with an investor will require you to share profits when your business performs well in the market. But when it comes to a business loan, the profitability of your business does not come into play. You will have to repay the principal amount and interest to the lender.

While there are various benefits of a business loan, there are a few questions that you should ask yourself before applying, such as-

  • How can you use a loan to grow your business?

    You can use funds from a loan to grow your business in various ways, from purchasing new equipment to expanding overseas. You will also be able to invest in the latest technology, hire more workers, launch new product lines, purchase inventory in bulk, and elevate your marketing efforts. Thus, it’s crucial to know why you need the loan as it can help you create a great financial plan for your business.

  • What is the interest rate of a business loan?

    The interest rate of a business loan will vary for each borrower. Finding out the interest rate will help you understand the amount of money you’ll need to repay the loan.

  • What are the documents required to apply for a business loan?

    Some basic documents that you need to submit include your identity proof and address proof. You need to consult your lender to understand the documents you must submit while applying for a business loan.

  • Is it possible to get a business loan with a low CIBIL score?

    Usually, a CIBIL score above 700 is required for a business loan. But some lenders also offer business loans to people with a low CIBIL score.

Closing Thoughts

Financial institutions offer business loans to help enterprises continue and expand their operations without disruptions. Most lenders disburse a financial loan within a short time and offer flexible interest rates and repayment options. Find a reliable institution for a business loan today to support your company's growth.


The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.

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