What is the Eligibility Criteria to Apply for Term Loans for Your Business?

A term loan is a short term or even long term loan that is offered for a stipulated period. Financial institutions offer such loans on a condition of payment in fixed instalments (emi) coupled with interest. These are offered at both floating as well as fixed rates of interest. The repayment duration of term loans ranges between twelve months to even sixty months. Personal loans, auto loans, business loans, education loans, gold loans, and even home loans are some of the examples of term type of loans.

The eligibility & documents required

  • Least operational history of 1 years
  • Business registration proof
  • Pan card of the promoter
  • Bank statement for the last 6 months
  • 1 yearit for >10 lacs
  • Kyc documents of the candidate and the organisation
  • Aadhaar card of the promoter

Of course, different type of term sort of loans can ask of different documents. However, the mentioned eligibility points are general in nature.

Loans apt for businesses

Businesses often experience the need for cash for many sort of purposes, and these loans are given to corporates for such a purpose of meeting their cash requirements. These requirements might be to fulfil their working capital requirements, or to even finance a fresh project. It might also be to purchase new machinery, or to construct a new manufacturing unit.

Types of term sort of loans

These loans vary based on their tenure, that varies from one business to even another. These might either be short term loans reaching from a few days to even a year, or they might be medium sort of term in nature. These medium type of term loans are somewhere between a year to even eighteen months, to even eighty four months.

The repayment in these types of loans is done in the shape of monthly instalments right from the cash flows of the borrowing company. A long term type of loan is most of the times beyond eighty four months to even twenty five years, and companies have to make sure that they pledge their assets in the shape of collateral to get such long term type of loans.

Advantages of getting this loan

Getting working capital to purchase any equipment and supplies for necessary business activities is the prime motive of these loan. The bank’s money promises you have the funds to buy the things for the organization as required that offers you a feeling of tranquillity.

  • Cheap

Term credits are the least type of expensive source of short term finance. These are even considered for medium term finance.

  • Tax reduction

The sum of interest of such loans falls under tax-deductible expenditure. Hence , the tax advantage is accessible to these interest.

  • Flexibility

Such loans are negotiable. Hence, they can be conveniently negotiated between the borrower and even the bank. Even the tic (terms and conditions) of such loans are somewhat flexible and not at all rigid.


To sum up , since you know the business loan eligibility and understand a few of the many perks of availing such loans;  go for them.

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