Becoming a self-employed person is a good reputation in society, but the problems faced by entrepreneurs from the first business are huge. It is a big challenge for a person to overcome all obstacles to becoming a successful businessman. The many problems everyone faces is finance. Even large business owners in different industries have fought a lot of financial crisis to establish their business and drive their daily business operations. Thus, the economy plays an important role in the businessmen's lives. Good ideas require the necessary financial support to flourish into a successful business.
There are different sources for businessmen to raise capital for their business. The most trusted source is from banks. There are various reasons why people choose banks as the best source for raising capital for their business. Banks provide a lower cost of funds in the form of corporate loans. There are different types of corporate loans at differential interest rates to help businessmen solve their financial crises.
Types of business loans:
The companies are of different kinds and need to finance at different stages of their business. The need is also different, banks help them to provide different types of corporate loans that help different SMEs to raise capital.
New project loans - Banks are interested in financing for new companies and also for new projects by existing companies. There are different criteria for getting new project loans and different from bank to bank. Project loans are approved for the security of the person such as residential property, commercial property or land.
Completion of existing loans - These loans are issued for expansion, replacement, diversification of an existing business. These loans are approved for short or long term to purchase goods, machinery or other fixed assets for the company.
Work Loans - These loans are given for the business to resolve sudden financial crises and repayments within short duration. The banks are more interested in providing working capital loans against their inventories, stock or receivables at the company.
Secure corporate loans - Business loans where companies raise their capital against the bank's security. It may contain blank, residential or commercial sites, gold, shares, bills, collateral as collateral to earn money for their business. The interest rate is preferably less.
Unsecured Business Loan - Every businessman can not afford to get a business loan, so banks help them with unsecured loans due to bank transactions and income taxes. These loans are charged with more interest rates compared to secured business loans.
Requirements from banks:
There are different steps and procedures followed by banks to provide funds. The procedure and documents to be provided to the banks as follows
Identity and address certificate of the company - Certificate of identity and identity card for partnership or holder.
The company's statutory legal registration - Whether the company is legally registered in accordance with state norms and has followed all procedures legally to establish itself.
Company Statement - Every bank is interested in seeing the company's last 1-year business transaction.
Income Tax Declarations - ITR helps bankers to check company performance, level of assets, assets and liabilities and tax the company that pays from its current earnings. This also plays an important role in determining the loan amount for businessmen.
Financial Security - It includes the fixed and movable assets of the company that help the bank to consider providing corporate loans based on asset value along with business transactions. This also protects banks against businessmen failing to repay the loan amount.
Previously, the loan lane - This is a very important factor taken into account by banks that will help them assess the company's financial position and also check previous payments on loans.
Disputes - It will help banks to judge the character of businessmen before they give a corporate loan.