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    Business Start up Loan

    Individuals who wish to start their own businesses but do not have the required funds to commence operations can approach banks to meet their financial needs. Start-up loans are a great way to acquire funds that can be repaid to the lender at a later date. Here, we will take a look at two of the most popular types of start-up loans, viz. Line of Credit and Equipment Financing.

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    Line of Credit

    A business start-up loan in the form of a line of credit works in a similar manner to a credit card. However, the card is tied to the individual’s business instead of their personal credit. One of the best benefits of a small business line of credit is that customers will have no obligation to pay interest on the borrowed sum for the first nine to 15 months, thereby making it easier to cover expenses whilst getting their business to a good start. The interest after the aforementioned period will rise to anywhere between 7.9% and 19.9%, but the customer will only have to pay interest on the sum they use (similar to a credit card).

    For instance, if the line of credit availed is Rs. 10,00,000, and the customer draws Rs. 2,00,000 to cover starting expenses. In this case, the customer will only have to pay back the Rs. 2,00,000 along with the applicable interest rate. The interest will only apply to the Rs. 2,00,000 and not the entire sum of Rs. 10,00,000.

    Customers who seek a line of credit for their new business are required to have a credit score above 700. Moreover, approval from the bank can take almost a month after the customer has furnished a detailed credit report. However, customers need not pledge any asset as collateral for this kind of loan.

    Equipment Financing

    In this type of loan for start-ups, the equipment that is bought when starting the business is pledged as collateral, thus enabling the lender to charge a relatively low rate of interest with slightly higher risk. The customer is expected to repay the amount used to purchase the equipment as revenues are generated from their business. Similar to a line of credit, applicants are expected to have a high credit score (680+), and the documents required to avail equipment financing include a vendor quote, a detailed credit report, and a statement showing the manner in which the customer intends to utilise the equipment. The main benefit of equipment financing is that the depreciation of the equipment can be used by the customer as a tax benefit for many years.

    The rate of interest with this type of loan will fluctuate. However, the average rate is around 20%, and though the rates can be higher in comparison with lines of credit, they can offer significant help in offsetting the customers’ start-up costs.

    Who can apply for Business Start-up Loans?

    Any individual who wishes to start a new business and has a good credit score may apply. Since most individuals who start their own business are young with low or no revenue history, banks only bother about the credit score to ensure that the applicant has a chance to embark on their start-up expedition provided they agree to make repayments on time.

    Business Start up Loan Reviews

    • Tata capital Personal Loan
      "Good service"
      0.5 4.0/5 "Great!"
      It was a fantastic experience with TATA CAPITAL for personal loan, i received my loan amount within 10 days. I expected the loan amount for Rs 4 lacs but they approved only for Rs 2.2 lacs. Rate of interest was nominal and the customer service was good.
      Was this review helpful? 0
      , chennai
      Reviewed on Dec 13, 2018
    • Bank Bazaar Personal Loan
      "Best Service"
      0.5 4.5/5 "Excellent!"
      I came to know about bankbazaar through one of my friend, my first time experience with bankbazaar was good. Customer service is good and their response is prompt I am using the mobile app of bankbazaar, it is user friendly and easy to use.
      Was this review helpful? 0
      , thane
      Reviewed on Dec 13, 2018
    • Tata capital Personal Loan
      "Good service"
      0.5 4.5/5 "Excellent!"
      My experience was good with TATA CAPITAL for personal loan, the loan amount was for Rs 1.25 lacs with tenure period of 4 years. Rate of interest was nominal when compared to others. I received my loan amount within 5 days and the customer service was good.
      Was this review helpful? 0
      , thane
      Reviewed on Dec 13, 2018
    • ICICI Bank Personal Loan
      "Best Service"
      0.5 5.0/5 "Blown Away!"
      My experience with ICICI bank personal loan was good, the loan amount was for Rs 5 lacs with less interest rate when compared to other banks. Process was smooth and the loan amount was received on time. Tenure period for this loan is 5 years and the customer service was good.
      Was this review helpful? 0
      , bangalore
      Reviewed on Dec 13, 2018
    • Bank Bazaar Personal Loan
      "Best Service"
      0.5 5.0/5 "Blown Away!"
      My experience was good so far with bankbazaar, they provide good services when compared to others. Customer service was very good and their response was on time. I am using the website of bankbazaar from 4 years, it user friendly and easy to use.
      Was this review helpful? 0
      , bangalore
      Reviewed on Dec 13, 2018
    • Tata capital Personal Loan
      "Best Service"
      0.5 5.0/5 "Blown Away!"
      My experience was good with TATA CAPITAL for personal loan, the loan amount was for Rs 2 lacs with tenure period of 3 years. Rate of interest was nominal when compared to others. I received my loan amount within 1 week and the customer service was good.
      Was this review helpful? 0
      , bangalore
      Reviewed on Dec 13, 2018
    • Bank Bazaar Personal Loan
      "Average service"
      0.5 3.0/5 "Satisfactory"
      I came to know about bankbazaar through google, they provide good services when compared to others. Customer service was good and they responded on time. Website of bankbazaar is user friendly and easy to use.
      Was this review helpful? 0
      , gurgaon
      Reviewed on Dec 13, 2018
    • Kotak Personal Loan
      "Not satisfied"
      0.5 1.0/5 "Really Bad"
      It was not a good experience with KMB for personal loan, they said the loan amount will be disbursed within 3-4 days but it took 15 days to receive the loan amount. I expected the loan amount for Rs 9 lacs but only Rs 5 lacs was approved. Tenure period is 5 years with high interest rate and the customer support was not good.
      Was this review helpful? 0
      , gurgaon
      Reviewed on Dec 13, 2018
    • Early Salary Personal Loan
      "Good in Service"
      0.5 5.0/5 "Blown Away!"
      I was planning for a personal loan and i looked for few banks but no one came forward . Applied it with Early Salary and i got my request processed on time. There was no delay and things were taken care.Interest rates are reasonable and I am happy with Early Salary Service .
      Was this review helpful? 0
      , hyderabad
      Reviewed on Dec 12, 2018
    • Axis Bank Personal Loan
      "Average service"
      0.5 4.0/5 "Great!"
      I have taken personal loan from the axis bank . As i hold my salary account from axis . They instantly approved the loan in where the rate of interest is too high . There is average processing fees for documents and approval . Their customer representative explained the terms and conditions
      Was this review helpful? 0
      , mumbai
      Reviewed on Dec 12, 2018
    • Bank Bazaar Personal Loan
      "Excellent service"
      0.5 5.0/5 "Blown Away!"
      I have been using bank bazaar service for first time, and they have given me good opportunity in getting loan or any other financial products easily , and i came to know about bank bazaar service through on line and i have been using there website , it is easy to access.
      Was this review helpful? 0
      , chennai
      Reviewed on Dec 12, 2018
    • HDFC Bank Personal Loan
      "Good service"
      0.5 5.0/5 "Blown Away!"
      I have been applied my personal loan with HDFC bank recently, the loan amount they have given me was sufficient they have given me up to 91,000,and the rate of interest they have charged me was higher, they have me up to 20%, and the processing fee is nominal, the process went smoothly.
      Was this review helpful? 0
      , chennai
      Reviewed on Dec 12, 2018
    • Tata capital Personal Loan
      "Excellent service"
      0.5 5.0/5 "Blown Away!"
      I have applied for my personal loan with Tata capital recently, and the loan amount they have charged me was sufficient, they have charged me nominal rate of interest up to 11.3% and even processing fee they have charged me was nominal, the process went smoothly without any issue.
      Was this review helpful? 0
      , bhubaneshwar
      Reviewed on Dec 12, 2018
    • Bank Bazaar Personal Loan
      "Good service"
      0.5 5.0/5 "Blown Away!"
      I have been using bank bazaar service for first time, i came to know bank bazaar service through on line, and i have applied a loan through bank bazaar , there service is too good, they have suggested me and help me out in getting loan easily and i have been using website it is easy to access.
      Was this review helpful? 0
      , bangalore
      Reviewed on Dec 12, 2018
    • HDFC Bank Personal Loan
      "Good service"
      0.5 5.0/5 "Blown Away!"
      I have been applied my personal loan with HDFC bank recently, the loan amount they have given me was sufficient, and the rate of interest while applying they said it would be charging 10.5% but after getting loan they have charge me up to 16% which was too high , the processing fee they have charged me was nominal,apart of that process went smoothly.
      Was this review helpful? 0
      , bangalore
      Reviewed on Dec 12, 2018
    • Bank Bazaar Personal Loan
      "Best service"
      0.5 5.0/5 "Blown Away!"
      I have been using bank bazaar service past six months or one years, and there service is perfect, i have applied for loan recently, there service was too good they have explain me about the loan and which is best bank for me and they have help me out in getting my loan amount easily, i have been using website it is easy to access.
      Was this review helpful? 0
      , pune
      Reviewed on Dec 12, 2018
    • Kotak Personal Loan
      "Excellent service"
      0.5 4.0/5 "Great!"
      I have applied for KOTAK MAHINDRA BANK recently, the loan amount they have given me was sufficient, and the rate of interest they have charged me was nominal, and even processing fee they have given me was nominal, and there was bit delay in loan amount as due to some internal issue , apart from that there service till now was good.
      Was this review helpful? 1
      , pune
      Reviewed on Dec 12, 2018
    • Bank Bazaar Personal Loan
      "A Place where Action Speaks more than words"
      0.5 5.0/5 "Blown Away!"
      Pretty Smooth Service and a place with Fair Deals is what you get in Bank Bazaar. I am very much happy with the services which i have received from Bank Bazaar. There are not many hiccups and this was probably my first time with Bank Bazaar. Well Bank Bazaar is a place where executives speaks less and the action speaks more.
      Was this review helpful? 0
      , mumbai
      Reviewed on Dec 12, 2018
    • Tata capital Personal Loan
      "Good in service"
      0.5 4.0/5 "Great!"
      This is my first loan with Tata Capital. The reason to go with Tata capital was their low interest rates. Also there was no processing fee charges at the beginning. Overall i am happy with the fees and charges and the rate of interest too seems reasonable.
      Was this review helpful? 0
      , mumbai
      Reviewed on Dec 12, 2018
    • Bank Bazaar Personal Loan
      "Good service"
      0.5 4.0/5 "Great!"
      I use Bank bazaar service a month ago only the service is excellent they provide i have 1st time applied for credit card and the documentation part went smoothly even i got my card soon i have used website of bank bazaar its easy to access,as i was surfing my net for some credit card i got to know about this service.
      Was this review helpful? 0
      , bangalore
      Reviewed on Dec 12, 2018
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