NBFC Business Loans: Advantages, Eligibility, & Requirements

NBFC business loans can be referred to as the financial support offered to small and medium-scale businesses from NBFCs. Traditionally, banks and other informal sources of lending have been the two most preferred options when it came to small or personal business loan. However, in recent years, there has been a paradigm shift, especially when it comes to MSMEs. The reasons behind these are manifold – the stringent and complex eligibility criteria as well as document requirements coupled with the demand for collateral. Informal lenders, on the other hand, don’t ask for much documents and collateral.

Non-Banking Financial Companies (NBFCs) have very well understood the problems faced by MSMEs. So, they provide a solution to these problems with their customer-friendly policies and reasonable interest rates. The number of advantages offered by NBFCs has attracted small businesses very quickly, and the popularity of NBFCs currently seems to be at an all-time high. When it comes to MSME loan eligibility, NBFCs are very lenient. In addition, they also have a very fast and smooth process that makes loan approval literally a cakewalk.

Advantages of NBFC Business Loans

The advantages offered by NBFCs are multiple, and all these benefits have made it possible for almost every small business to get a loan. The business owner can use it either to stabilise their operations or to venture a growth opportunity. The main advantages of NBFC business loans are as follows:

What Are The Benefits Of NBFC Business Loan Over Bank Loan?

  • Collateral-free Business Loan: one of the major advantages offered by NBFCs is that you can get a business loan approved even without putting up collateral against the loan. The demand for collateral for getting a business loan approved by banks has been one of the major issues why small businesses had to look for informal sources of capital funding. But now with NBFCs, a business which does not have collateral can also get a business loan at an affordable rate of interest.

  • Easier & Faster Process: one can get his/her business loan approved with NBFCs without even meeting the lender as NBFCs allow you to complete the entire process online. Right from filling up the application form to uploading the necessary documents and the verification of documents, all of it is done online. This ensures that the entire process can be carried out within a few days and that too, without any hassle.

  • Instant Fund: as soon as your business loan gets approved, these NBFCs ensure that the loan amount gets disbursed and credited in your bank account within a few working days. Also, NBFCs don’t charge any penalty on the foreclosure of the business loan after the payment of few EMIs.

Eligibility criteria for an NBFC Business Loan 

  • Last 12 months – minimum turnover of Rs. 10 lakhs
  • Previous year – ITR of Rs. 1.5 lakhs or higher
  • Residential proof – business and house
  • Business in continuity (business vintage) for at least two years

Business Loan Eligibility Criteria For An NBFC Business Loan

Documents Required for an NBFC Business Loan:

  • Updated bank passbook of the last nine months
  • ITR statement for the last 12 months
  • PAN card
  • Business place and residence address proof

The benefits and the ease of getting the loan sanctioned is the main reason why NBFCs are becoming such a popular choice amongst small and medium-scale businesses. For SMEs, these small business loans from NBFCs are a great opportunity to get that financial backing, which ensures their survival as well as growth in this competitive era.

NBFC business loan

The lenient eligibility criteria and document requirement have been a very encouraging sign for the SMEs as they now know that they have someone to fall upon. Thus, they can afford to take more risks in a bid to promote and grow their businesses. The growth of the small businesses is not just beneficial for them but is also a great sign for the economy of the country. If we look at it that way, NBFCs can be one of the major game-changers in the context of our economy as well.

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