Multiple banks. Different interest rates. Call it a "conflict of interest".
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    Corporate Loan

    Corporate loans are sanctioned for an existing business and industrial house which has been in action for at least 5 years and has made profits for at least the last 2 years. In addition to that, the organisation will also be required to have a good credit rating and should have a good track record in terms of being a successful business. In case the organisation had loans in the past, the records in regard to the repayment of the credit are also taken into consideration.

    There are a number of banks and financial institutions that offer corporate loans and some of them are listed below:

    HDFC Bank Corporate Loan

    Name of Institution Rate of interest (% p.a.) Max. loan amount (Rs.) Processing Fees (%)
    HDFC Bank 15.65% to 21.20% Up to 40 lakhs (Up to 50 lakhs in selected locations) Starts at 0.99%

    Benefits of HDFC Bank corporate loan:

    • Fast sanction of loans.
    • Completely transparent process.
    • Security not required.
    • Competitive pricing.
    • Dropline Overdraft facility of up to Rs.5 lakh to Rs.15 lakh.

    DHFL Corporate Loan

    Name of institution Rate of interest (% p.a.) Max. loan amount (Rs.) Processing Fees (%)
    DHFL - Up to 20 crores From 1.25% to 2.00% (plus applicable GST)

    Benefits of DHFL corporate loan:

    • Loan term of up to 5 years.
    • The application fee ranges from nil to Rs.10,000.
    • Highly competitive interest rates.

    Bajaj Finserv Corporate Loan

    Name of institution Rate of interest (% p.a.) Max. loan amount (Rs.) Processing Fees (%)
    Bajaj Finserv - Up to 30 lakhs -

    Benefits of Bajaj Finserv corporate loan:

    • Collateral not required.
    • Special pre-approved offers.
    • Flexi Loan facility.
    • Hassle-free process.
    • Minimal documentation.

    ICICI Bank Corporate Loan

    Name of institution Rate of interest (% p.a.) Max. loan amount (Rs.) Processing Fees (%)
    ICICI Bank - Up to 1 crore -

    Benefits of ICICI Bank corporate loan:

    • No requirement for collateral.
    • Minimal documentation.
    • Competitive interest rates.

    IIFL Corporate Loan

    Name of institution Rate of interest (% p.a.) Max. loan amount (Rs.) Processing Fees (%)
    IIFL 18% to 25% Up to 50 lakhs Up to 3% of the loan amount

    Benefits of IIFL corporate loan:

    • Flexible options for repayment of loan.
    • Collateral not required.
    • Minimal documentation and quick approval of loan.
    • Loan repayment tenure of up to 12 to 48 months.

    Most businesses are constantly undergoing changes. The main aim is to serve the interest of their existing and potential customers in the best possible way. This requires constant upgradation and expansion of the corporates. Many a time, an organisation might have to wait for a long time before they gather enough funds to give form to their next step of expansion. This is where the corporate loans offered by banks and financial organisations come in to the scene.

    How to Apply for a Corporate Loan?

    You can apply for a corporate loan by choosing one of the following methods:

    • Step 1: You can visit the nearest branch of your preferred banking network and apply for a loan.
    • Step 2: If the bank offers online application facility for a corporate, you can consider applying for the loan through their online portal.
    • Step 3: You can also get in touch with a Direct Selling Agent or DSA to apply for a loan.
    • Step 4: You can also consider visiting a third-party website where you can compare corporate loans offered by various banks. You can compare the different aspects of a loan and choose the one that suits you best. Once you have decided, you can apply online through the third-party portal itself and get your loan processed.

    Eligibility Criteria

    There are various factors which affect the eligibility of an applicant for a corporate loan. These factors can be summed up as:

    1. Age of the applicant: For most lenders, the eligible age range for applying for a corporate loan is 21 years to 65 years.
    2. Filing of ITR: The applicant should have filed his or her ITR for the previous years. Banks usually require at least 2 years’ ITR files to consider the eligibility of an applicant for a corporate loan. The credit repayment capability and the monthly income of an applicant are evaluated on the basis of the submitted ITR.
    3. Annual income: The eligibility for a loan on the basis of the annual income of an applicant varies from lender to lender. In general, if an applicant has an annual income of at least Rs.1 crore, he or she is considered to be eligible for an unsecured business loan (or corporate loan). However, there are certain lenders who offer credit to applicants with an annual income of less than Rs.10 lakh as well.
    4. Stability in banking: Generally, lenders check the bank statements of at least 6 months before they approve a loan. Through this exercise, the lender checks the track record of the applicant’s stability in terms of banking, as well as the repayment history of previous loans.
    5. Stability of the business: The lenders also check the history of the business (in case of existing businesses) to find out the growth and stability of the business. This helps the lender decide whether the loan should be approved or not.

    Documents Required

    The documentation process for corporate loans is quite simple and quick. The documentation process may vary from bank to bank. However, the documents that are usually required are listed below:

    • PAN card.
    • Proof of identity such as Aadhaar Card, Driving License, Election Commission Card, Passport, etc.
    • Proof of address such as Aadhaar Card, Voter’s ID Card, Passport, etc.
    • Bank statement for past 6 months.
    • Continuation proof such as ITR, Establishment Certificate, Trade License, or Sales Tax Certificate.
    • The latest Income Tax Returns (ITR) in addition to total computed income, profit and loss account, and balance sheet for the past 2 years (to be certified by a CA).
    • Other documents - Board resolution, certified copy of MOA (Memorandum of Association), certified copy of AOA (Articles of Association), and declaration of sole proprietorship (or partnership deed).

    Features and Benefits

    The features and benefits of business loans can be summed up as follows:

    • Provision of emergency funds: A corporate loan is one of the best ways to get finance for the expansion of your business. You can use the loan for various purposes related to your business and help it reach new heights.
    • Dropline Overdraft facility: There are certain lenders who offer the option of Dropline Overdraft. Through this facility, a current account is opened separately in which the loan amount is deposited. In this way, the borrower will be required to pay interest only on the amount that he or she actually utilises.
    • Flexible tenures: Most lenders offer a flexible tenure for the repayment of the loan which usually ranges between 12 months and 48 months. Some lenders even provide loans for a tenure of 60 months. This allows the borrower to grow his or her business with ease.

    FAQs

    1. Does the rate of interest for corporate loans differ for different applicants?
    2. A: Yes, the rate of interest for business loans might be different for different applicants. The rates are usually dependent on factors such as the credit history of the applicant, his or her annual income, stability in banking activities, credit score, and so on. These factors determine the risk factor of the individual. The higher the risk, the higher will be the applicable interest rates.

    3. Should I always apply for the loan which offers the lowest interest rate?
    4. A: No, it is recommended to check the terms and conditions of the lender before you apply for a loan. The lowest rate of interest might not always be the most beneficial loan for you. Hidden charges might arise which will make the overall loan amount quite heavy for you. It is a prudent move to check the charges and rates associated with the loan such as the processing fees, late fees, cost of administration, foreclosure charges, and so on, before applying for a loan.

    5. Why does the bank need the financial statements of the business?
    6. A: The financial statements of the business such as the profit and loss statement, balance sheet, and so on are required by the lenders to find out the creditworthiness of the applicant. Having stability in these statements makes the applicant a low-risk candidate and thus helps in the approval of loans.

    7. Is it possible to get a business loan for a small business?
    8. A: Yes, many lenders in India provide loans for small businesses.

    9. Other than the interest rates, what are the other factors that are required to be checked at the time of making a loan application?
    10. A: The other factors that you should be aware of before applying for a loan from a particular lender are the processing fees for the loan and the pre-closure charges (if any). These charges might increase your total debt to an extent. To avoid that, it is recommended to check these charges beforehand.

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    Display of any trademarks, tradenames, logos and other subject matters of intellectual property belong to their respective intellectual property owners. Display of such IP along with the related product information does not imply BankBazaar's partnership with the owner of the Intellectual Property or issuer/manufacturer of such products.

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