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Startup Business Loan

Startup business loan

Many entrepreneurs with great business ideas are unable to start their businesses due to a lack of funds. Money at the right time is one main factor that decides the start and the future of a business. However, when new entrepreneurs start, they discover that money becomes the major hurdle. The universal solution to this is nothing but a startup business loan. You borrow a startup loan to help you start operating your business, but like every loan, you have to pay it back.

A startup business loan facility offered by banks or other financial institutes to new businesses or can be used for various purposes such as purchasing equipment, furniture, raw materials, or paying for expenses incurred to set up a business such as purchasing or leasing a building, etc,. 

How do you choose a business startup loan?

 A startup loan can be extremely difficult to obtain. The main reason is simply the fact that banks do not want to take risks. Obtaining a startup loan often requires a lot of patience, effort, and determination. The maximum amount of startup business loan you can get depends on your business, its turnover, profitability as well as your credit history. Before choosing a startup business loan consider the interest rate, repayment terms, and policy, application fees, etc.

What are the different types of Startup Business Loans?

Startup business loans are classified into two:

1. Short Term Working Capital Loan

It is known as a short-term working capital loan or a line of credit. People use it to pay salaries or other expenses. There is no need for collateral for this loan. Also, it gives an initial interest-free period. The business can utilize this loan amount for its day-to-day operational costs. It will help you to run the business activity without any hindrance of the fund.

2. Long Term Loans

Long-term loan or equipment financial loan, used to fund the expansion or growth of the business, funds the expansion or growth of the business. This loan is available for a longer period. It would require the business as collateral. People use it for purchasing heavy or expensive machinery, inventory, long-term expenses, etc.

Also know: Business Loan Schemes for Startups In India
What are the Features and Benefits of a Startup Business Loan?

Startup loans are different from other financing loans for established companies and have various benefits and specific features.

1. Flexibility: It allows the business owner to concentrate on growth rather than just worry about repayment. It offers flexible repayment tenures for startups 

2. Collateral: No collateral is required as startup loans are unsecured business loans.

3. Availability of Funds: Lenders ensure swift disbursal of the fund as soon as your loan is approved.

4. Tax Benefit: The new entrepreneurs will get three years of tax relief.

5. Compared with venture capital, the bank’s rate of return is fixed at a nominal interest rate.

Must read: Best Low Investment Business Ideas
About Finline!

Finline is an online platform for creating financial reports for getting bank loans and investments. It’s like ‘Canva’ but for financials. If you are an entrepreneur looking for a bank loan, you need to have a well-crafted project report. We, at Finline will help you with that. Our team will help you create a powerful business plan in ten minutes. That too in your language. Also, all public and private sector banks working in India accept our project report. Click to create your report.

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Business Loan Eligibility

Bank provides business loans to a wide variety of small, medium, and large enterprises, and professionals. Also, provide top-up facilities for existing business loan customers who may require more credit at a later period. To meet the business loan eligibility is the key to getting a business loan.

Business loan eligibility comprises basic conditions like CIBIL score, age, business turnover, Details are mentioned below:
  1. The business loans can be availed by business entities like:
  • Sole proprietorship firms
  • Private limited companies and closely held limited companies
  • Partnership firms
  • Self-employed individuals/ Professionals like CA’s, Doctors, etc.
  • Retailers
  • Manufactures for service
  • Traders
  • SMEs & MSMEs

2. Applicant age should be between 25 years to 68 years.

3. Applicant should be an Indian citizen, with no loan defaults

4. The business should be operational for a minimum period of 3 years

5. Turnover for 3 years must be showing an upward trend.

6. The balance sheet of the business should be audited by a registered CA.

7. The business should not be blacklisted by any entities.

8. The location of the business should not be on the negative location list.

9. Applicant should not be a defaulter of tax

10. Specify the applicant’s source of income earning

11. Applicant should submit a detailed Business Plan/Project Report

12. Applicant should own either a home, office, shop, or godown

13. CIBIL score must be above 700.

What is the CIBIL Score? What is its Importance in Availing Business Loan?

CIBIL score or credit score is a 3-digit numeric that represents the repayment capability of an applicant, along with the repayment history. The CIBIL score spans between 300-900 that is computed based on repayment history. Banks and NBFCs generally accept any score above 700 when providing business loans at reasonable interest rates. Applicants should maintain a decent CIBIL score for financial benefits or to meet business loan eligibility.

Maintaining a decent CIBIL score to avail business loan is tough. Increasing the CIBIL score is not an overnight process, as it requires time from 3-6 months. Therefore, start to build your credit score from today or at the earliest.

*Eligibility may vary as per the scheme chosen.

About Finline!

Finline is an online platform for creating financial reports for getting bank loans and investments. It’s like ‘Canva’ but for financials. If you are an entrepreneur looking for a bank loan, you need to have a well-crafted project report. We, at Finline help you with that. Our team will help you create a powerful business plan in ten minutes. That too in your language. Our reports are accepted by all public and private sector banks working in India. Click to create your report.

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What are the Documents Required for Mudra Loan?

PMMY loan offers up to Rs. 10 Lakh for MSMEs for non-corporate non-farming origin businesses. The objective is to encourage the young generation into entrepreneurship by promoting them with financial aid, focusing on the growth of micro-enterprises. The applicant will require some specific documents to produce to the bank. Below are the documents required for Mudra Loan:

1. Proof of Identity
  • Applicant should produce self-attested photocopies of:
  • Aadhar Card
  • Driving License
  • Voter ID
  • PAN Card
  • Passport
2. Proof of Address
  • Utility Bill copy of electricity, telephone, gas, property tax, etc.
  • Aadhar Card
  • Driving License
  • Voter ID
  • Passport
  • Latest bank account statement
3. Duly fill out the application form for the Mudra loan
4. Applicant passport size photo in 2 number
5. Proof of Business
  • Certificate of Registration
  • Business License
  • Articles of Organization
  • Proof of Business Ownership
  • Or any other documents confirming the business existence and address
6. Business Plan/Project Report

A business plan also known as a project report is a crucial document when applying for a bank loan. The bank uses this document to analyze the overall feasibility, risks, financial viability, and potential of a project. A well-crafted and convincing project report increases the chances of loan approval. With Finline you can craft a compelling project report in less than 10 minutes. That too in your language. Our reports are accepted by all public and private sector banks working in India. Click to create your project report.

7. Other Mudra Loan Documents
  • Photos of owners, partners, etc.
  • Proof of Category – SC/ST/OBC
  • Estimated balance sheet for the loan period
  • Income/sales returns
  • Last 12 month’s Bank Statement
  • Partnership Deed or MoA or AoA
  • Sales during the period and estimated sales for the loan period
  • Business report certifying the economic and technical viability of the business

 Based on the type of business and bank, the documents required for Mudra loan change as per the specific loan schemes like Shishu, Tarun, and Kishor.

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How to get Startup Business Loan in India?

A startup business loan in India is meant to support the financial hurdles of a new business. Startups and micro industries require funding to grow and manage the business. As a result, the business will thrive in the market. At the initial stage startups don’t have access to the funds in the market. Therefore governments have taken a step to provide funds and promote these industries. Startup business loans in India can be used towards things like working capital, the purchase of equipment, machinery, supplies, inventory, and furniture, and the purchase of construction equipment, etc.

What are the Criteria for Startup Business Loans in India?

Get a Startup business loan from a bank or a financial body to raise capital or expand your current business. The applicant should meet the requirements of the lenders. A few requirements are the applicant profile and documents. Below are some points:

1. Applicant Profile

The personal background of the applicant will be verified. If the Applicants have criminal backgrounds this will make them ineligible or delay the process. The age limit of the applicant should be 21 to 65.

2. Business background: 

Outline the goals and the objectives of the business should be clear. The firm should not be five years old and it should be reregistered as private or partnership.

3. Business Plan/Project report: 

A detailed and elaborate business plan should be submitted. It will give the lender a detailed overview of the startup idea. Get a perfect business plan/project report with  Finline.

4. Financial statements:

 Submit all the financial projections like balance sheets, profit and loss statements, and cash flow statements.

5. Legal documents: 

Applicant should submit all the legal documents to prove the legality of the business.

6. Collateral:

 Some government loans are collateral-free, also they help the applicant get more amount.

What are the documents required to take a Startup Business Loan in India?                                                     
  1. Identity Proof – Passport, PAN card, Aadhaar card, driver’s license, or voter ID
  2. Address Proof – Electricity bills, telephone bills, Passport, Aadhaarcard 
  3. Income Statement – Proof of stable income to be provided
  4. Bank Statements – The last 6 months’ bank statement to be submitted
  5. Photos – 2 copies passport size.
  6. Financial statements audited by a CA for the past 2 consecutive years
  7. IT returns for the last 2 consecutive years
What are the Government Loans for Startup Businesses in India?

If the applicant has all the above requirements ready, they need to identify the appropriate scheme offered by the government of India for entrepreneurs. Some of the popular schemes offered by the government of India for startups and MSMEs are as follows:

1. Credit Facilitation Scheme

This scheme is handled by the National Small Industries Corporation (NSIC). They target to meet the credit needs of the MSME units. The NSIC partnering with various banks to provide loans to the MSME units. The repayment tenure will range from 5 years to 7 years, with the possibility of extending it up to 11 years.

2. Pradhan Mantri Mudra Yojana (PMMY)

The Micro Units Development and Refinance Agency (MUDRA) launched PMMY in 2015. It aims at offering loans to all kinds of manufacturing, trading, and service sector activities. The loan categories under MUDRA are – Shishu, Kishor, and Tarun. The loan amounts range between Rs.50,000 and Rs.10 lakh.

3. Credit Guarantee Scheme

New and existing MSMEs engaged in service or manufacturing activities, excluding educational institutions, agriculture, retail trade, Self Help Groups (SHGs), etc., qualify for this. You can borrow up to Rs. 200 lakh under this scheme.

4. Startup India

This scheme extends loans to enterprises in manufacturing, trading, or services. Loans ranging between Rs.10 lakh and Rs.1 crore can be availed. You can repay the loans taken under this scheme within seven years.

5. Sustainable Finance Scheme

This scheme offers loans to industries that deal in green energy, renewable energy, technology hardware, and non-renewable energy. The government started this scheme to offer sustainable development projects.  

About Finline!

Finline is an online platform for creating financial reports for getting bank loans and investments. It’s like ‘Canva’ but for financials. If you are an entrepreneur looking for a bank loan, you need to have a well-crafted project report. We, at Finline will help you with that. Our team will help you create a powerful business plan in ten minutes. That too in your language. Also all public and private sector banks working in India accept our project report. Click to create your report.

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How can I Apply MUDRA Loan?

Applicants can apply for Mudra loans online and offline at their convenience. MUDRA, Micro Units Development & Refinance Agency loans are offered up to ₹ 10 Lakh to micro, small, and medium enterprises. The loan is applicable for a repayment period of a maximum of 5 years without submitting any security as collateral. Public sector banks, private sector banks, NBFCs, co-operative banks, small finance banks, regional rural banks, and microfinance institutions consider the loan application with genuine and proper documents.

How to Apply for a MUDRA Loan Online?

Applicants can apply for a Mudra loan online by visiting the official website of the particular bank. It saves time and trouble-free process. Below are simple steps to apply for Mudra loan registration online:

  1. Identify the appropriate bank.
  2. Browse the official website of the particular bank.
  3. Download the online application form.
  4. Fill in the different sections and fields with the required details
  5. Complete the application and necessary documents
  6. Submit Project Report/Business plan
  7. Wait for the bank representative to contact you for further processing.
  8. Once the loan application form and attached documents are processed and verified, the loan shall be approved and further disbursed by the bank
How to Apply for a MUDRA Loan Offline?

If applicants want to file the Mudra loan application form offline, follow the below-mentioned steps:

  1. Applicants should research the particular bank that provides Mudra loans. Study the interest rates and other charges before you put up an application.
  2. Completed application form.
  3. Submit Project report/Business plan.
  4. Together with the application form, submit the passport-sized photographs, identity proof, address proof, company’s address and identity proof, caste certificate, if applicable, financial statements, IT returns, sales tax returns, and other equipment details.
  5. Complete all the bank’s formalities and procedures.
  6. The loan shall get approved, once all the documents are verified.
  7. After the loan is approved, the desired amount will get credited to the particular bank account within working days.
How to apply and download the MUDRA Loan application form?

CLICK HERE

About Finline!

Finline is an online platform for creating financial reports for getting bank loans and investments. It’s like ‘Canva’ but for financials. If you are an entrepreneur looking for a bank loan, you need to have a well-crafted project report. We, at Finline will help you with that. Our team will help you create a powerful business plan in ten minutes. That too in your language. Also, all public and private sector banks working in India accept our project report. Click to create your report.

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Business Plan to Start Your Own Company

Anyone can have a great business idea, but turning an idea into a viable business is a game changer. A business plan is a must to start your own company. Writing a formal business plan increases your chances of viability. Plan your business ideas for the future, not just for tomorrow. Excitement, when you’re ready to start your business. First, before setting up the office space, and seeking legal advice, you need to put your thoughts on paper. This will help you to identify the missing points and stay organized and focused.

In fact, there are few types of research you need to perform before you start writing a business plan to start your own company:
  1. Why do you need a business plan?
  2. Who will be the target audience for the business plan?
  • Investors
  • Bankers
  1. What are the opportunities in revenue generation?
  2. Do a market study
  3. Who is your competitor?
  4. What should your business plan comprise?
It’s not about the number of pages you write, your business plan should include:
  1. Executive Summary

What your company is and why it will be successful. Include your mission statement, your product or service, and basic information about your company’s leadership team, employees, and location.

  1. Company Description

This provides information about your company like the problems your business solves, and lists out the consumers, organizations, or businesses your company plans to serve.

  1. Market Research

Analyse what other businesses are doing and what their strengths are. Define your target market and your plans for this specific audience.

  1. Description of products or services

Classify in detail about the product or services, explain the lifecycle of the product, and how it benefits the customer.

  1. Sales and Marketing

Outline the pricing, sales information, how you’ll attract the customers, how exactly the sale will happen and also how to retain the customers

  1. Competitor Analysis

Strengths and weaknesses of your direct and indirect competitors are vital information that should be done simultaneously with identifying your target audience. Demonstrate how you will gain a competitive edge against your competition.

  1. Management Team

Explain how your company will be structured and who will run it. State whether the business is a sole proprietorship, partnership or LLC. Provide background information on all key players involved in the business as well as use an organizational chart to explain who will do what and who is responsible for what.

  1. Financial Plan

Complement your funding request with financial projections. Also, convince the reader that your business is stable and will be a financial success.  Include income statements, balance sheets, and cash flow statements. Specify the amount needed over the next two, three and even five years. On-going business expenses, including salaries, insurance costs, promotional expenses, etc. Also, anticipate the need for additional funding. Break-Even Analysis is one important thing to mention in the financial projection plan.

     9. Appendix

List your documents like licenses, permits, legal documents other contracts etc.

How to get a Business Plan?

With Finline you can create a powerful business plan in ten minutes. That too in your language. All public and private sector banks working in India accept our reports. Click to create your report.

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Loan Schemes

Swami Vivekananda Swanirbhar Karmasansthan Prakalpa

The West Bengal Swarojgar Corporation Ltd implements the Swami Vivekananda Swanirbhar Karmasansthan Prakalpa(SVSKP), a flagship scheme of the Department of Self Help Group & Self Employment (WBSCL).

The basic goal of the scheme is to increase access to credit for the growth of rural/urban enterprises. SVSKP yojana gives assistance to unemployed young people and groups of people. More emphasis has been placed on training, especially in trades where locally available raw materials could be used to produce. Making finer articles rather than being wasted due to ignorance, and in traditional crafts where there is ample potential.

What are the Benefits of  Swami Vivekananda Swanirbhar Karmasansthan Prakalpa(SVSKP) Yojana?
  • Generation of self-employment opportunities across the state. 
  • Promotion of enterprises in the remote and rural areas of West Bengal. 
  • Financing the funds to the educated unemployed youth of the state to promote self-dependence. 
  • Better utilisation of idle resources. 
  • Maximum Govt. subsidy of Rs. 1.5 lakh for individual 
  • West Bengal Swarojgar Corporation Ltd is providing 3.5 lakh for groups of five or more, which represents 30% of the project cost 
What is the Eligibility of SVSKP Yojana?
  • The applicant must be between 18-45 years of age. 
  • The monthly family income of the applicant should be less than Rs.15,000
  • This project is applicable to any type of small-scale industry, production unit, trading unit, or service point in rural or urban areas. It also includes any unit involving agriculture and animal resources.
  • Employees of the Central Government, State Government and any government-approved organization or his family cannot participate in this project.
  • Swami Vivekananda Swanirbhar Karmasansthan Prakalpa pays 5 per cent of the project cost to the applicant.
  • 30 per cent grant from the State Government (maximum of Rs. 1.5 lakhs in individual projects and maximum of Rs. 3.5 lakhs in joint ventures)
  • State-owned banks or financial institutions must pay the remaining 65 per cent or the remainder at current interest rates.
What are the Documents Required for SVSKP Yojana? 
  • Birth certificate
  • Employment Exchange Card / Unemployment Certificate from BDO
  • Caste Certificate
  • Colour Photograph
  • Project Report/Business Plan
  • Trade License
  • Educational Qualification Certificate. 

In the above list, a Business plan also known as a project report is a crucial document when applying for a bank loan. The bank uses this document to analyze the overall feasibility, risks, financial viability, and potential of a project. A well-crafted and convincing project report increases the chances of loan approval. With Finline you can craft a compelling project report in less than 10 minutes. That too in your language. Our reports are accepted by all public and private sector banks working in India. Click to create your project report.

How to apply for Swami Vivekananda Swanirbhar Karmasansthan Prakalpa(SVSKP) Yojana? 

Visit the following link to download the application form for the SVSKP Scheme

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Why do you really need a Project Report?

The world has changed a lot since the idea of a project report was formalized decades ago. Things move much faster now and it’s easier than ever to get a business started. So, it’s rational to think that startups don’t need project reports anymore. After all, you could just dive in and start building a business without spending much time thinking about your goals or how your business is going to work.

However tempting, starting a business without a plan is not a great idea. Why?
  • It’s not just about funding. Planning is still a critical part of starting a business, but not for the reasons you might think. Most people think that the plan is all about showing it to other people to raise money or get a loan. But, that’s not the real reason planning is so important.
  • The process is what’s valuable. Writing a project report is important because of the process you’ll go through when you put the plan together. When you plan, you discover what you need to do to start your business and what it’s going to take to be successful. Writing a plan is all about you, and clarifying your business idea for yourself and your business partners.
  • Get clear and specific about your idea. After all, before you’ll be able to explain your business idea to friends, family, and potential investors, you’ll need to be able to explain your idea to yourself. The value of writing a project report comes from going through the process, not from printing a document.
  • Reduce your risk. And, spending a little time on planning before starting your business reduces the risk that you’ll lose money and make silly mistakes. Your plan will help you discover if your business can make money and what you need to make it successful. Sure, you could jump right in and start your business without a plan, but it’s much more likely that you’ll waste time, money, and resources—unless you have a plan.

Planning guarantees that you’ll be more successful. Over the years, there have been multiple academic studies of companies that do plan and those that don’t. And, time and time again, the results show that companies that plan are more successful, more likely to get funding, and more likely to achieve their goals.

About Finline!

Finline is an online platform for creating financial reports for getting bank loans and investments. It’s like ‘Canva’ but for financials. If you are an entrepreneur looking for a bank loan, you need to have a well-crafted project report. We, at Finline help you with that. Our team will help you create a powerful business plan in ten minutes. That too in your language. Also, our reports are accepted by all public and private sector banks working in India. Click to create your report.

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Project Report for Bank Loan

If you need a bank loan to start your dream business, a project report is a necessary document. Struggling to make one? Don’t worry, you are at the right place!

In this blog, we will discuss about:
1) What is a project report?
2) Why do you need it?
3) How can you prepare a convincing project report?

1) What is a project report?

A project report is a mandatory document that outlines different aspects of the business or startup project. It should contain the project’s details, feasibility, and financial requirements. Here comes the next question, why does someone need this?

2) Why do you need it?

There are several reasons which show project reports as a must. Some of them are listed below:

  • Project reports will help the bank assess your project’s success rate and can thereby make sure that you can repay the loan.
  • It will help the bank understand the project’s risks and rewards.
  • Submitting a decent project report shows the lender that you have done enough homework and is serious about the project. The project report also provides information about your qualifications and experience.
3) How can you prepare a convincing project report?

A strong and convincing project report should contain the following:

  1. Executive summary: An executive summary is a short summary containing the business’s overall status. It should be concise and should provide an overview of the entire project.
  2. Project description: It should explain the project’s nature, purpose, scope etc.
  3. Details of promoters: The details of the promoter’s skills, qualifications and experience should be mentioned.
  4. Details of Employees: Like the promoters, the details of the employee’s skills, qualifications and experience should also be mentioned.
  5. Production plan: This includes the details such as plant and machinery, raw material used and steps in the manufacturing process.
  6. Market analysis: It conducts research about the market to understand the demand for your product and services.
  7. Marketing plan: This provides the details about the marketing and sales strategies of your product/service.
  8. Project cost estimation: It’s the estimated expense that arises at the time of building the project.
  9. Balance sheet: All accounts will be visible on the balance sheet so that the lender can see where the money was spent.
  10. Profit and loss account: It shows whether the company is making a profit or a loss.
  11. Cash flow statement: It allows the lender to understand whether you have the ability to repay the loan.
  12. Loan repayment plan: This section should provide a well-defined plan for repayment of the loan.
  13. Break-Even point evaluations: It shows the point at which the project revenue equals its expenses.
  14. Conclusion: Lastly, Conclude the report by summarizing the key strengths of the project. Make it short and compelling.
About Finline!

Still, having trouble creating one? Let us help you. Our expert team at Finline helps you craft a compelling project report in less than 10 minutes. That too in your language. Our reports are accepted by all public and private sector banks working in India. Click to create your report.

Now there is nothing stopping you from starting your dream business. Begin your journey with Finline right away!

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