Pre-approved Business Loan

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Pre-approved Business Loan

Business owners require a constant inflow of capital to run a business. However, they look towards a business loan as the amount to borrow may be relatively high compared to a personal loan. Such loans involve a series of steps that the business owners need to fulfill to obtain approval for the loan and this may make the process slightly complicated. Thus, the independent amount is created by lenders in the form of a loan product that allows business owners to obtain immediate funds.

Banks and NBFCs, which are lending institutions, require borrowers who are involved in business and are financially strong as indicated by a good credit score. This one serves as the foundation of pre-approved loans. A pre-approved business loan is a loan that lenders present to business owners before they complete the application process by approving a particular amount for the loan.

If the business owners are interested, they can complete the loan application form and submit the necessary papers to get the pre-approved amount as a business loan.

Features and Benefits of Pre-approved Business Loan

Instant Access to Funds: Pre-approved business loans provide immediate access to a predetermined loan amount, allowing businesses to quickly respond to financial needs or opportunities without the usual application delays.
Simplified Application Process: With pre-approved status, the loan application process is streamlined, often requiring minimal documentation and fewer formalities, making it faster and more convenient for businesses to secure funding.
Flexible Loan Terms: Pre-approved loans typically come with customizable terms, including varying loan amounts, interest rates, and repayment schedules, giving businesses the flexibility to choose options that best suit their financial needs and capabilities.
No Collateral Required: Many pre-approved business loans are unsecured, meaning businesses can obtain the loan without needing to provide collateral, reducing the risk for the borrower.
Enhanced Financial Planning: Knowing the pre-approved loan amount in advance helps businesses plan their finances better, allowing for more effective budgeting, investment, and growth strategies.

Business Loan EMI Calculator

Loan Amount:

50K 1Cr

Loan Term (months):

12 60

Interest Rate (%):

9.75 30%

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Eligibility Criteria for Pre-approved Business Loan

Get immediate approval for a business loan up to Rs. 1 Core. You can apply for our business loan online, as long as you meet some basic criteria mentioned below. Meet the simple requirements for business loan eligibility and complete the necessary documentation to receive the funds you require in as little as 24 hours* after approval.

Age: Minimum 21 years at the time of loan application & Maximum 65 years at the time of loan maturity
Nationality: Indian citizens, should not have defaulted on any previous loan(s) with any lender
Eligible Entities: Individuals, Startups, MSMEs, Sole Proprietorships, Partnership Firms, Public and Private Limited Companies, Limited Liability Partnerships, retailers, traders, manufacturers, and other non-farm income-generating business entities engaged only in the services, trading, and manufacturing sectors
Business Vintage: Minimum 1 year or above and your business should not fall under any list of blacklisted businesses.
Business experience: Minimum 1 year, business location to remain same
Annual Turnover: Preferably 6 lakhs per annum. Shall be defined by the Bank/NBFC
Credit Score: Preferably 700 and above as having higher credit scores improves chances of loan approval
Additional Criteria: Applicant must own either a residence, office, shop, or godown

* Charitable organizations, NGOs, and trusts are not eligible for a business loan.

Note: The above-mentioned eligibility criteria are for indicative purposes only. Actual eligibility criteria defined by Banks/NBFCs shall vary as per their sole discretion and shall be defined at the time of loan application submission.

Documents required for Pre-approved Business Loan

Documents required for business loans to establish your business identity, income, loan repayment capacity, and place of business. Here are the few common set of documents that you will need to submit when applying for a business loan:

KYC documents of applicants, partners, and co-applicants: Passport/ PAN Card/ Voter’s ID/ Aadhaar Card/ Driving License/ Utility Bills (Recent Water or Electricity Bills)
Address Proof: Business Vintage and Address Proofs
Income Proof: Last 6 months’ bank statement and Last year’s ITR for existing enterprises
Proof of Business: Business registration certificate, GST filing, Gumastadhara, trade licence, drug licence, TIN, VAT registration, Company PAN card.
Specific to Business Type: — Proprietorship: Proprietor’s PAN and Aadhar card copies.— Partnership: Partnership deed copy.— Pvt. Ltd./LLP/One Person Company: Specific documentation as required.
Any other document required by the lender *

Interest Rates & Charges of Pre-approved Business Loan

Although business loan rates and charges might differ significantly based on the credit history of the loan applicant and the business itself, the following table will provide you with a general indication of what to expect:

Particulars	Charges
Business Loan Interest Rates	9.75% p.a onwards
Loan Amount	₹1 Lakh to ₹1 Core
Loan Processing Fees	Minimum 2% plus applicable taxes
Lowest EMI per month	Starting from ₹2,112* per Lakh for 60 months
Loan Tenure	12 - 60 months
Prepayment/Foreclosure Charges	0%* If paid from own sources & 4% If paid from other sources
Default Interest	Minimum 3% per month
Repayment Instrument Dishonor Charges	Upto Rs. 2500/ + GST (if applicable) per bounce
Stamp Duty	At actuals (as per state)
* No Other Hidden Charges

Tips for Getting Pre-approved Business Loan

Prepare a Solid Business Plan: Develop a comprehensive business plan outlining your business model, growth strategies, financial projections, and how the loan will be utilized. A well-prepared business plan can enhance your credibility with lenders and facilitate pre-approval.
Build a Strong Credit Profile: Maintain a high credit score and a clean credit history by managing your debts responsibly and making timely payments. A strong credit profile increases your chances of pre-approval and can lead to better loan terms.
Maintain Consistent Cash Flow: Demonstrate stable and predictable cash flow by managing your business finances efficiently. Regular and healthy cash inflows reassure lenders of your ability to repay the loan.
Provide Accurate Financial Documents: Keep up-to-date and accurate financial records, including balance sheets, profit and loss statements, and tax returns. These documents are crucial for lenders to assess your financial health during the pre-approval process.
Establish a Good Relationship: Maintain a positive and proactive relationship with your bank or lender. Regular communication and a strong banking history can make the pre-approval process smoother and faster.
Use Pre-Approval Tools: Take advantage of online pre-approval tools offered by banks and financial institutions. These tools can give you a preliminary indication of your eligibility and potential loan terms before you formally apply.

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Frequently Asked Questions (FAQs)

What is the repayment tenure of a shop loan?

The repayment tenure shall depend on the interest rate and loan amount. It ranges between 12 months to 60 months.

Is it possible to foreclose the loan?

Yes, you can foreclose your business loan. However, depending on when in the tenure you chose to do so, foreclosure charges between 0 - 4% will be applicable.

Will the credit rating have any impact on business loan approval?

Good credit scores will help you obtain a lower interest rate and will ensure quick loan approval. If your credit score is less than 700, you may have to submit additional documentation, offer a co-guarantor or collateral, and/or avail the loan at a higher interest rate.

Is collateral required to avail a shop loan?

At Grahaan, we provide collateral-free business loans of up to Rs. 75 Lakhs*. If you require a loan larger than this, then you will be required to pledge property as an asset.

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Pre-approved Business Loan