How Can You Get A Start-up Loan? Here Are The Quick Steps!

Start-up Loan

The Start-Up ecosystem in India is quickly booming with enough prospects for new companies. A loan for young companies can provide up to Rs. 20 lakh, to finance the development of your Start-up. You will cover different company expenditures such as overhead, inventory, infrastructure costs, etc. with this personalized Startup funding.

Start-ups with a minimum business vintage of 3 years are entitled to apply for a startup loan in India. Filling the online application form, uploading a few papers, and getting the money in your account is all you have to do.

When you are running a startup, hitting overhead expenses and matching them with the need to grow would really be the big challenge. Let’s confess; it’s not that easy. You’re starving for funds, but not so many are ready to take the gamble from financial institutions. If you think it’s still too early to get equity participation, or if you’re cagey about VC financing, then a start-up loan opportunity is open. Start-up loans, like most conventional loans, allow a young business to borrow money.

As an entrepreneur, you ought to understand early on that the essence of obtaining financing opportunities lies in good and solid paperwork. Start-up business loans, after all, are primarily for supporting start-ups with little to no credit background.

Types of business loans a startup can apply for

Line of Credit and Equipment Financing are the two forms of common start-up business loans.

Line of Credit 

A credit line is much like a credit card, where the card refers to the organization rather than the personal credit of the customer. The benefit of this loan is that for the first nine to 15 months, the borrower would not have to pay interest on the borrowed number, making it easier for start-ups to handling the preliminary costs of launching a company. Similar to a credit card, with the sum used, the borrower has to pay interest.

Equipment Financing 

The machinery is guaranteed as collateral for this form of a loan, which allows the financial institution to charge lower interest, but with a comparatively higher risk. If they receive money from their company, the creditor can refund the sum used to buy the machinery. The advantage of financing machinery is that the creditor will demand a tax benefit for the equipment depreciation.

Securing your loan

Follow the instructions below to secure your loan:

  • Get a thorough and crisp strategic strategy 
  • Describe the company’s priorities and targets, with a map that indicates the company’s progress along with the future returns.
  • Provide as near as possible a simple estimate of the funds 
  • Specify in the business plan the use of the start-up loan 

Features of loans for startups

This loan is provided by most financial institutions online or as a 1-minute application loan or directly through their branches. Some of the lenders give the convenience of doorstep service also

  • Minimum paperwork needed
  • In general, financial firms do not ask for any form of guarantee or collateral for start-up loans. 
  • Competitive interest rates. However, that depends only on the credit history of the individual. 
  • Stable tenure 
  • Flexible repayment options

Startup Loan Eligibility Requirements

First of all, the candidate who has applied for the loan should be between the age of 21 and 65. And as far as the documents required for a business loan are concerned, please read the following:

  • Personal ids, such as a PAN card or Aadhaar card 
  • Proof of address
  • Company PAN card 
  • Bank account statements 
  • Certified Memorandum and Articles of Association Originals

That’s all

It’s a quick and fast procedure and like any other product to secure a venture loan for a small company. A person applying for a start-up loan should be mindful of their circumstances and financial condition as they have to repay the loan along with the other expenses incurred from the day-to-day operations of the company. Fullerton India can be your best destination in case you are looking for cheaper interest rates and flexible repayment options.