Secured Business Loan

A secured business loan can play a crucial role in providing small business owners with substantial funding to support their growth and development endeavors. To avail the loan for small business, you need to be a self-employed or salaried individual and have certain documents ready. Here’s the list of documents:

• Salaried
• Self-Employed

Document Type	Salaried
Application Form
Identity Proof PAN (Mandatory) Voter ID Passport Driving Licence Aadhar Card
Address Proof Passport Voter ID Driving Licence Aadhar Card
Income & Other Documents Salary Slip/Certificate Form 16/ITR Bank Statement
Property Documents Copy of chain documents of the property (if applicable) Copy of Receipt made to the developer (if applicable) Copy of Buyer Agreement Copy of Agreement to Sell (if executed)

Document Type	Self-employed
Application Form
Identity Proof PAN (Mandatory) Voter ID Passport Driving Licence Aadhar Card
Address Proof Passport Voter ID Driving Licence Aadhar Card
Income & Other Documents Form 16/ITR Bank Statement
Property Documents Copy of chain documents of the property (if applicable) Copy of Receipt made to the developer (if applicable) Copy of Buyer Agreement Copy of Agreement to Sell (if executed)

MSME loan is the best way for small businesses to scale up and increase their business footprint. The secured business loan interest rates are much more economical and lower than those of unsecured business loans.

We at IIFL Home Loans, offer competitive interest rates for MSME Loan or startup business loans, which start from 10.75%*. However, these may depend on various factors.

A secured business loan helps in business expansion, purchase of machinery/equipment investment in new projects, etc. However, before you apply for a secured business loan, there are a few things you need to include in your checklist, such as:

Business and Personal Credit Score

Both your business credit score and your credit score play an important role in the business loan application process. If you find your score is low, you should strive to increase it.

Eligibility Criteria and Documents Required

You need to check the business loan eligibility criteria before applying with a particular lender, as requirements vary from one financial institution to another. Once you match this, make sure you possess all the documents required by the financial institution of your choice.

Solid Business Plan

Before you go ahead and apply for a business loan, you should be sure of your objectives, fund utility, revenue model, and repayment plan. Having a thorough business plan in place can make it easier to obtain a loan at favorable terms.

Fill Out the Application Form Carefully

Make sure to pay attention to every little detail and not make even a small error. In many cases, a small error can lead to your application being rejected. If you have any doubts, you should resolve it with the lender before filling out the form.

A secured business loan can be availed by sole proprietorships, partnerships, and limited liability companies with strong credentials.

• First and foremost, the borrowers need to check if their business meets the eligibility criteria to get loan for small business. Along with the asset, they have to offer security which will undergo evaluation.

• Once the due diligence is done, the borrower can apply for MSME Loan by submitting the documents required and taking note of business loan interest rates and the fees involved.

• Once the borrower files the requisite documents, the approval and disbursal of the loan are efficient and quick.

Before you get started with the process of obtaining your secured business loan, it is also important to know the fees applicable to it:

• A minimal one-time processing fee.

• Late payment fee (in case of delays in repayment).

• Miscellaneous charges such as collateral evaluation, stamp duty, documentation, amortization charges, collection of registration certificates, etc. as applicable.

• A minimal pre-payment charge.

The following is the list of fees & charges applicable to IIFL Home Loans:

For more details, please refer to Schedule of charges (https://www.iiflhomeloans.com/schedule-of-charges).

As per the borrower’s needs, the interest rate policy, the purpose, and the loan tenure, lenders usually use different modes to calculate the repayment schedule. Some of the common business loan repayment options are:

Equated Monthly Instalments (EMIs)

This type of payment schedule enables borrowers to make payments in equal parts via scheduled monthly payments. The total EMI amount includes both principal and interest components of the business loan.

Bullet Payments

In this type of repayment mode, the borrower pays the accumulated interest during the tenure of the loan for small business and pays the principal amount at the end of the tenure. This is usually extended only for a fixed term.

Prepayment

You can opt for the prepayment mode in which you end up paying the loan amount before the tenure ends. This is usually the option for those borrowers who have accumulated cash and want to clear all their dues as soon as possible. However, a penalty may apply depending on the lender’s business loan policies.

Electronic Clearance Service (ECS)

This method is usually for those borrowers who do not have an account in that financial institution. It allows the lender to deduct the principal amount from the bank account chosen for the repayment plan.

Note: Please check with the lender about the repayment options when applying for the loan.