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According to estimates, there are around 42.5 million registered and unregistered SMEs in India. These businesses constitute about 24% of the service sector GDP and 6.11% of the manufacturing sector.

SMEs in 2018 account for approximately 95% of all industries currently operating in the country.

A major contribution to the progress of SMEs in recent years has been influenced by the growing population, which in turn has led to the expansion of a fast-expanding consumerist economy. Furthermore, the easy availability of financing from NBFCs has also had a significant role to play.

Small businesses can quickly avail commercial loan from such companies. You can avail these loans within one working day provided you comply with the eligibility requirements and the necessary documents. Companies also provide customised features that make the loan even more lucrative.

Follow these tips mentioned below before you apply for commercial loans:

Tip 1. Choose the Right Custom Loan

Financial institutions have various types of commercial loans customised and tailored for specific individuals or financial purposes.

For example:

  • Business loans for women

NBFCs provide business loans specifically aimed at women entrepreneurs. These loans come with special features which make them more beneficial for such individuals.

women Business loans

  • Working capital loans

Working capital loans are vital for your small business if you are facing obstacles to managing your regular expenses. As a business owner, you should know how to ensure that your firm never runs out of working capital.

These loans can help you financially optimise your organisations’ daily operations.

  • Machinery loans

Machinery loans can be availed for purchasing or upgrading plant & machinery. These loans are tailored for business about to undergo an infrastructural expansion.

  • SME and MSME loans

SME and MSME loans explicitly target these businesses. Competitive commercial loan interest rates enable such business owners to repay them easily over time.

NBFCs provide these Commercial Loans up to Rs. 30 lakh with pre-approved offers which saves you time when availing financing. Pre-approved offers also come with home loans, personal loans, business loans and various other financial products and services. You only have to provide your name and phone number to check your pre-approved offer.

Tip 2. Create a Sound Business Plan

A sound business plan can help you secure a loan more easily. Such a plan gives the lender a thorough overview of your company and its future.

You must include the following on your business plan:

  • Company description.
  • Marketing strategies.
  • Details of management heads.
  • Current and projected financial statements – Balance sheet, Profit & Loss Account, Cash Flow, etc.
  • Proof of business – Trade license, SEBI registration, partnership deed, Memorandum of Association, Articles of Association, a certificate from Registrar of Companies, etc.
  • Proof of your identity – PAN, Aadhaar, Passport, Voter ID, Driving License, etc.
  • Income tax returns.
  • Bank account statements.
  • Loan amount to be availed.
  • Purpose of the loan.

Ensure accurate information. Misrepresented facts and information are one of the most common reasons your business loan can get rejected. Also, a credit score of 750 or more can also help you in this case. Such a credit score can also help you receive lower commercial loan interest rates.

Tip 3. Keep the loan Tenor Short

Commercial loans come with a tenor of up to 8 years. Opting for a longer tenor will make the EMIs affordable, but the total interest payable will be high. On the other hand, keeping the tenor short will make the entire loan affordable but increase the EMIs.

Along with these tips, also fulfil the eligibility criteria that the lender sets forth. For example, you may need a business vintage of at least 3 years. Also, you have to be between the ages of 25 and 55 years to avail a commercial loan.


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