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A juncture comes inevitably in any business when you think of expanding your business by investing in capital expenditure.  You also need capital to start a fresh business (anybody’s guess, isn’t it?). A business loan can be the best financial help you can get at such junctures.

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Many banks & NBFCs these days offer lucrative business loan schemes without collaterals and with pre-approved offers. Here, we will tell you everything you need to know about SBI business loans, one of the most sought after business loans in India.

Features & benefits of an SBI Business Loan

SBI has introduced quality business loan products to address the needs of individuals, self-employed proprietorship/partnership firms and trading/manufacturing units. Here are some features and benefits of SBI business loans:

  • Quick approval for SBI business loan apply online
  • You do not need to pledge collateral for business loans up to Rs 1 crore
  • Under its unique Stree Shakti Package, SBI offers an interest rate concession of 0.05 % to women entrepreneurs (having more than 50 % shares) for loans from 2 lakhs to 50 lakhs.
  • Under the SBI Mudra Loan Yojana, micro-loans in the range of Rs 5,000 to Rs 10,00,000 are offered to small-scale business owners
  • Pre-payment charges are applicable if pre-payment is done within 6 months.
  • Flexible loan repayment tenure from 1 year to 15 years
  • Nominal processing fee in the range of 2% to 3%
  • Zero foreclosure charges
  • Special low-interest schemes for existing SBI customers
  • Attractive business loan schemes for self-employed and trade & manufacturing businesses (Fleet finance scheme. SME credit card, Asset-backed loan, e-smart loans and Pradhan Mantri Mudra Yojana)
  • Transparent processing and no hidden charges
  • Online procedure to check eligibility

Eligibility and documentation

Any Indian citizen who has a residual income and has his own business (about to start his own business) is eligible to apply for an SBI Business Loan. The other parameters an applicant needs to satisfy are as follows-

  • Registered businesses  belonging to the below-mentioned categories are eligible for an SBI Business loan-
  • Manufacturing
  • Trade
  • Service
  • Self-employed professionals
  • The minimum age of the applicant should be 21 years at loan application and 65 years at maturity
  • The business should be in continuous operation for a minimum of 3 years
  • The business should have a gross turnover in the range of Rs 20 lakhs to Rs 10 crore for at least 2 years
  • The minimum income criteria for self-employed applicants is Rs 25000 per month
  • The self-employed applicants should have a minimum experience of 2 years in the present line of business

SBI business loan documentation criteria

Document checklist for SBI business loans in different categories are mentioned below-

  • General Documents for SBI  business loan

  • Completed application form with passport size photographs
  • Identity proof – PAN Card/Passport/Driving License/ Voters ID card
  • Address Proof (Passport/Trade license /Ration card/latest telephone or electricity Bill/Sales Tax certificate /Lease agreement)
  • Last 6 months’ bank statement
  • Age proof- Voter’s ID/Passport/PAN card/ Proof of business continuation
  • Copies of IT return for last 2 years
  • Last 3 years’ audited financials (signed by CA)
  1. Documents for business loan for self-employed (partnership farms & Private Ltd. Co.)
  • Identity proof of the Company: Service tax / IT return/ VAT/Sales tax/Excise registration/Electricity Bill/Water Bill/ Shops and Establishment Registration/PAN ID /Municipal tax receipt in the name of the concern, Memorandum &  Articles of Association
  • Individual Identity Proof: Identity Proof required for authorized signatories and 2 directors ,including the MD (any one of – Driving license, PAN card,  Passport and Voter’s identity card.

  • Documents required  for business loan for self-employed individuals  (professionals)

  • Identity proof of the sole proprietorship
  • IT return/PAN ID  of the concern or Electricity/Water bill, Municipal tax  in the name of the business concern
  • Residence proof for the sole Proprietor: Passport, Driving license, Ration card, Voter’s ID card
  • Individual identity proof for the sole proprietor: Passport, Driving license, Voter’s ID card, PAN card.

  • Documents for business loan for  self-employed individuals (non-professionals)

  • Individual identity proof
  • IT return for 3 years
  • Proof of identity of the sole proprietorship
  • Sales tax returns for 3 years
  • Last 6 months’ bank statement of the main banker/bank statement copy for the term loan
  • Copies of age-wise book debt, periodic stock and creditors’ statement – for last 3 months)

SBI provides highly competitive interest rates for their business loans. The rate of interest depends upon a number of factors such as the profitability of the business, the credit rating of the applicant, future growth potential etc. These parameters are assessed from the documents submitted by the applicant.

Post Author: Gabriel Hervey