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Business loan in India are nowadays became popular because it helps to execute your business ideas with the help of financial aid

Importance of CIBIL Score for availing Business Loan in India:

CIBIL score also plays an important role in the approval of business loan application. This score reflects how your credit record has been and how you have managed your loans and credit cards so far. Generally, a bank consider CIBIL score of 750 or more is better. Even if your CIBIL score is 650 or less than there are chances of getting loan from NBFCs, Small Finance Banks and Micro Finance Institutes.

To get a business loan in India, what should be the CIBIL score of a non-employed?

Those who are new-to credit, i.e. those who do not have CIBIL score, should also start preparing CIBIL score for loan approval, as applicants with low CIBIL score are more likely to get the loan application rejected. To take a business loan for start-ups, a higher CIBIL score is required, as the risk involved in giving them a loan is high. Hence, build and maintain a good credit score to increase the chances of loan approval.

Following are some popular loan schemes for women entrepreneurs:

• Women enterprise fund scheme
• Mahila Samridhi Yojana
• Central Bank Of India to St Kalyani
• Shrinagar and Annapurna from State Bank of India
• Stree Shakti Package from State Bank of India
• Dena Shakti Yojana from Bank of Baroda

Types of Business Loan in India

Term Loan:

There are several types of term loans, such as short-term loans, long-term loans and other small business loans. The amount offered under term loan depends on the credit profile of the applicant and repay it in 12 months to 5 years. Apart from the above types, term loans are of two types, unsecured business loan in India and secured business loan. For secured loans, you have to deposit security/guarantees .

Working Capital Loan:

Working Capital Loan is provided to meet the day to day needs of the businesses. You can take business loan in India for other purposes, such as for business expansion, to buy machinery or equipment, to buy raw materials, to rent or to pay salaries to employees, etc.

Letter of Credit:

Letter of credit is used in international trade. An industry that does import-export business has to work with suppliers from other countries. These suppliers need a guarantee that they will get their payment on time, issuing bank letters of credit will give this guarantee on behalf of the industry.

Point of Sale (POS) Loan:

In this loan, the trader takes a loan on the basis of his sales record. The merchant has to give the record to the bank how many transactions have taken place at his POS machine (the machine on which the debit/credit card is swiped for purchase/payment) in the last few months. On the basis of this record, the bank gives business loan in India to the merchant. There are also many options for loan repayment, such as, the merchant will pay the loan every month or whatever purchase at the POS machine, some part of it will go to the merchant and some to the bank.

Overdraft Loan:

In an overdraft loan, you will have to give an overdraft account for which sanction a limited amount. You can withdraw money from that account whenever you want up to that limited amount. Interest will apply only on the amount withdrawn and not on the entire amount. Example: If you get Rs 2 lakh. Got an overdraft of Rs.1 lakh out of it. Withdraw, the interest is only Rs 1 lakh. But it will take only and not Rs. 2 lakh. Feather.

This was all about getting business loan in India and its types.