How to apply for Short-Term and Long-Term Business Loans Online in India

In India, access to funds required for Business Loans has been getting easier due to the availability of online platforms. Suppose you want to finance immediate-term liabilities or fresh expansion concepts. In that case, understanding how to apply for either short-term or rather long-term Business Loans using the Internet can be handy – it saves time and effort. The guidelines listed below will assist you in navigating the process.

What Are Short-Term and Long-Term Business Loans?

• Short-term Business Loan: These types of credits are meant to cater to those needs that require cash urgently. They are usually repaid within a period of one year to three years since that is what they help with- working capital management, inventory purchases, among others, or just temporary cash flow problems.
• Long-term Business Loans: This category extends up to periods ranging from five years up to twenty-five years specifically tailored for huge outlays like infrastructure development as well as the purchase of machinery or expansion purposes in any given company.

Both types can be applied online, thus providing room for flexibility in different companies’ needs.

Benefits of Applying for Business Loans Online

• Convenience – Submitting applications from either your office or home is possible when you go digital.
• Faster Processing – Platforms based over the Internet usually give approvals within two days at most for short-term ones. Long-term ones sometimes take up to a week before they are approved via these same portals.
• Transparency – All terms & conditions are clear on platforms, ensuring that every user is aware.

Steps to Apply for Short-Term Business Loans

1. Assess Your Needs

Determine the amount of money required and the reason why it is needed. Short-term Business Loans, for example, are best suited to small financial gaps or emergencies.

2. Choose the Right Lender

Find short-term Business Loans online providers through research. Confirm whether they offer:

• Competitive rates of interest
• Minimum processing fees
• Reviews from clients
• Check Eligibility

Typical questions from an Indian lender include:

• What is the minimum turnover your business should be making
• Do you have a valid GST number
• How old is your business
• Gather documentation

Typically, the documents needed are:

• Bank statements for the previous six months up to one year
• A PAN card as well as an Aadhaar Card
• Proof of business registration
• Submit your application online

Make sure that all information given when submitting is true before uploading documents onto the lender’s site through the website/desktop app.

3. Await Approval

After applying, chances are high that one may get online approval on his/her short-term Business Loan application between 24 hours and 48 hours in the majority of cases where the decision takes this short time.

Also Read: Short Term Loans for Small Businesses

Steps to Apply for Long-Term Business Loans

Step 1 - Evaluate Business Goals

If you plan to establish an additional branch office, it would be better to go for long-term loan facilities. Just make sure that its duration concurs with your repayment potential.

Step 2 - Compare Options Online

Tools like EMI (Equated Monthly Instalment) calculators usually exist on platforms that provide long-term loans online, mostly for comparisons between different repayment terms.

Step 3 - Check Eligibility Criteria

Indian lenders may need these conditions for long-term credit facilities:

• Having a strong credit score (preferred 750 and above)
• Collateral must be provided (this could include property or equipment, among other things)

Step 4 - Preparing Documents

Some common documents required include:

• Business models, together with financial projections
• Last 2-3 years’ income tax returns
• Proof of security if there is any

Step 5 - Sub-invoices Online

Most of these platforms have step-by-step guides that can aid in filling out the online form for application with ease.

Step 6 - Track Application Status

You should follow up on how far your application process has gone after submission. For long-term loans, approval might take 7 to 10 days on average.

Key Stats About Business Loans in India

Interest Rates:

• Short-term loans – 12% to 16% per annum
• Long-term Business Loans – 10% to 15% per annum
• Rate of Approval — On digital platforms, the approval rate for small and medium-scale enterprise (SME) loans is as high as 90%.
• Market Growth — India will witness an increase in demand for both short-term finances and long-term credit facilities in its MSME (Micro, Small and Medium Enterprises) sector at an annual growth rate of 18% from 2023-2028.

Also Read: How to Get a Loan for Small Business?

Tips to Ensure Loan Approval

• Maintain a good credit score by paying existing debts on time.
• Provide accurate business and personal information.

With regards to your cash flow, settle for manageable loan terms, choosing shorter durations in cases where quick returns are expected or longer durations if steady repayment is anticipated.

The Bottom Line

Getting a loan in India has become simpler than ever before. All one needs to do is follow the steps provided in the article. Know what you want, pick the right moneylender, and request courageously.

Take your business to the next level today by applying for a Business Loan. This will not only ease the entire process of running your business but also provide you with the much-needed capital to grow and focus on the development of your venture.

Moreover, you can check your monthly EMIs with the help of our Business Loan calculator before applying for a loan for your business. This way, you can easily focus on meeting your financial goals instead of putting in the effort to calculate monthly EMIs.

FAQs

Q.1. Which loan should I choose for my business? Short term or long term?

A.

• Short-term loans suit immediate financial needs.
• Long-term loans work for large-scale growth plans.

Q.2. Do I need collateral to get a business loan?

A.

• Short-term loans are often unsecured, requiring only financial credentials.
• Long-term loans usually need collateral, such as property, machinery, or business assets.

Q.3. What are short-term business loans commonly used for?

A. These loans are mainly used for managing cash flow, paying suppliers, purchasing inventory, or covering unexpected operational costs.

Q.4. What are long-term business loans used for?

A. Businesses use long-term loans to invest in infrastructure, buy machinery, expand operations, or fund large capital expenditures.

Q.5. What are the eligibility criteria for a business loan?

A. Lenders typically require a CIBIL score of 750 or above, stable business income, and well-maintained financial records to approve a loan.

Disclaimer:

The contents of this article are for information purposes only and not a financial advisory. The information is subject to update, revision, and amendment and may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject Godrej Capital or its Affiliates to any requirements. Godrej Capital or its Affiliates shall not be responsible for any direct/indirect loss or liability incurred by the reader for making any decisions, financial or otherwise based on the contents and information mentioned. For more information, please visit www.godrejcapital.com.