Before getting loans from banks in India, one must aware of rules to get a loan. its customer has to fulfill certain criteria. Before getting personal loans or any type of loan, anyone has to provide information regarding his citizenship, age, income, nature of business etc. For this he has to produce some necessary documents before the bank as such as Paperpat of benefit after paying the tax, personal identity card, address proof, PAN card, audited financial report for about three years, income tax returns copy of three years, copy of sales tax return of three years, and bank statement of six years. We will go through rules to get a loan in the following paragraph.
RULES WHICH IS NOT BACKED BY SIDBI OR LAGHU UDHYOG VIKAS NIGAM
Rules to get loan above one crore or which is not backed by SIDBI or Lughu Udhyog Vikas Nigam: Under this, the bank asks you to deposit security in the form of property or liquid securities. It is something to cover the risk arises due to the loan. Before sanctioning of loan bank would examine the actual economic status of your company. If it is not running in a positive way then the bank may deny your loan request. Along all of these country’s economic condition also matter. At the time when company’s economic condition is not good bank generally hesitate to provide a loan.
If you are asking for loan regarding manufacturing business, it will be easy to avail. And if asking for startups or service sector things gets somewhat hard, especially if you’re not depositing collateral.
SOME OTHER RULES
But still, there are some of the banks who do not ask for collateral security from a small businessman. For the small businessman, the government is managing to provide collateral free loan through SIDBI or Laghu Uudhyog Vikas Nigam. It is under the government’s credit guarantee system. Under this scheme, anybody can get a loan up to one crore.
There are certain rules to get a loan for the business need. Before asking for a business loan your organization should either a firm, partnership firm, private limited company, or public limited company.
On applying for request of the loan, the bank may ask to deposit margin money of about 25 percent of your total project. When bank will ready to finance for 75 percent of the total project it will ask for collateral security, which means the bank will ask you to deposit papers related to your property, gold, FD, etc against that 75 percent bank is lending you.
But there are many government rules to get a loan which makes the business loan easy or open the way to clear the hurdle and give a start to your business. If you do not have margin money, in some of cases bank finance your margin money also. In the cases, you possess special knowledge, or you have any innovative idea bank can provide you a loan for margin money also.
ONE MORE SUGGESTION:
If you don’t have a special qualification or innovative idea then also you can ask loan for margin money through SIDBI. For this SIDBI is running schemes like RISK Capital or Seed Capital. For this SIDBI is running India Aspiration Fund or SMILE (SIDBI Make In India Loan for Small Enterprises). Even then also you are not getting support for margin money then as much amount you can submit for margin money consider it as 25% of the total and ask 75% of that total money from the bank. You should also be aware that there is provision for 15-35 percent of subsidy also.
One more way to get a loan, if your project cost is 25 lakhs or less than you can ask for a loan through PMEGP (prime minister employment generation program) where you have to deposit only 5-10 percent of margin money and get a loan of 90 percent of total project cost, There is a provision of 15 to 35 percent of subsidy also.
One more problem people normally face is guarantee and collateral security, solution for this is CGTMSE (Credit Guarantee Fund Trust for Micro and Small Enterprises). If your project is candid in all the way then you can get a loan without collateral or guarantee.