Feature Image

WHAT TAX BENEFITS COMES WITH BUSINESS LOAN?

Posted on Wednesday May 12th, 2021

In recent times, COVID-19 outbreak has changed everything terribly, from being quarantined and work from home, online classes to online shopping, making all this new normal for whole population. The corona virus pandemic has brought most of the countries to a complete stand-still, where everyone is going through a tough financial condition. Therefore, global economy has been fallen into the pit of recessions, these days. Thus, businesses are no less which have suffered the consequences of poor customer demand, fluctuation in supply and now have to face the adverse effects of this recession and on the way to restore their production to the supply chain.

So, all these prevailing conditions have put the most of businesses to look for funding options so that they can get back to the previous track. In India, one of the major business funding options, business loans are the popular one as many business persons go for it. Before you Apply For Business Loan one of the most important things which a loan borrower should know is about the tax benefits on business loan. Availing any of the tax exemptions on your business loan can reduce your loan burden; let’s know in details about the tax benefit on business loan.

Interest rate is tax deductible on business loan: The rate of interest on business loan varies from lender to lender, where the loan money is categorized as an expense as it is being utilized in fulfilling business needs. Hence, the rate of interest paid to repay the loan quantum is claimed as tax-deductible expense. When the income tax is calculated on your business, then the interest rate paid is deducted from the gross income while the principal amount is never a tax deductible. Always try to maintain exact records of your business loan as if you are asked by the income tax department to submit the associated proofs.

Some other tax benefits on business loan
√ The interest amount on business loan is tax exempted.
√ The principal on business loan quantum is never tax deductible.
√ While filing your income tax, interest rate paid on business loan needs to be deducted from the gross earnings.
√ Usually, the tax liability is calculated by cutting down the business expenses from the gross business earnings.
√ One needs to fulfill the required eligibility criteria to avail the tax deduction on business loan.

You must remember while you Apply For Business Loan Online or offline that it is a type of funding provided by any of the traditional lender or NBFC, so it cannot be counted in your income. Therefore, it is not tax-deductible. Generally, loans against business do not alter what one owes in taxes because according to Income Tax Act 1961, getting funds through borrowing isn’t the same as earning funds for the business. So, the interest rate levied of the loan against business is considered to be tax-deductible while the principal money is not tax-deductible. However, one can enjoy the tax benefits on business loan but there are some rules to be followed.


Feature Image

HOW TO PICK A RIGHT BUSINESS LOAN FOR YOU?

Posted on Thursday January 7th, 2021

If you are planning to own a successful business or you want to grow your ongoing business, therefore, figuring out to start a profitable firm needs to raise the funds for your business product. There are number of reasons for which your needs funding such as need to purchase new machinery, pay wages to the employees, land purchase to set up the production unit, to buy an office or it can also be needed to expand the existing business or to consolidate the existing debt.

Initially, a business person need more funds to build up sales and one will need money to maintain the cash flow and to pay salaries. Now, the question arises where do you get these funds from? There is a large lending sector for potential business loans, these days. In our country, business plays a crucial role and contributes highly in the GDP of country. The small and medium businesses mainly contribute 95 percent of the industrial units in India. The demand of Business Loan is increasing by each passing day. Hence, lending institutions are making it easier to apply for business loan and get instant funding.

In this article, we are providing you with some tips which will tell you, how to pick a right business loan for you:

⇒ Type of Loan: In lending sector, there are different kinds of business loans available which include term loan, working capital loan, business line of credit, equipment loan or small business loan. Therefore, to avail the maximum benefits, one first needs to decide which loan you require. If you need to upgrade the machinery, you can go with equipment loan and if you need to remunerate the employees or want to expand your existing business, you can avail a working capital loan. You can research and knowing your options will help you to opt for the best-suited scheme.

⇒ Right business loan lender: When you need to Apply For Business Loan you will find innumerable lenders offering number of benefits. Many of the lenders approve and disburse the loan quantum easily whereas many of them take time to deliver the money. If you really want to grab the best option for yourself then do not trust any random lender easily. Finding the right lender may take some time so go through different lenders and compare the interest rates and read the customer reviews. Once you find the right lender, you can go ahead to take a loan.

⇒ Documentation: When you avail a business loan, the lender will ask about your cash flow to be sure about the repayment capacity. It is your responsibility to provide the correct details of everything to avoid the loan rejection. Try to find those lenders who have minimum set of eligibility criteria along with less paperwork.

Selecting a right business loan is very important for a particular business’s success. There are varieties of online lending platforms which will help you to assess the different business loans offered by various lenders. Selecting the right loan product can also add the growth to your business exponentially.


Feature Image

HOW TO PICK THE RIGHT BUSINESS LOAN TO ACHIEVE SUCCESS

Posted on Monday July 13th, 2020

If you want to own a successful business or want to make your existing business successful, a regular cash flow is a part and parcel for every company to start a profitable business. The common reasons for which a company needs funding can be purchasing a new machinery, wages payment to the staff, buy an office space, bring down the existing debt or to expand the pre-existing business. Therefore, to get the funds, there is a large marketplace for business loans as corporate sector plays a significant role in contributing the GDP of the country. Nowadays, the demand for business loans is increasing; hence financial institutions are making it easier to avail funding for businesses. Here are few tips to tell you that how to pick the right Business Loan to achieve success.

TYPE OF LOAN: There are different types of business loan available in India for small businesses which are mentioned below:

• Working capital loan.
• Term loan.
• Machinery loan.
• A business line of credit.


So, to avail the benefits, you first have to decide about the type of loan you need. If you need to purchase new or upgraded machinery/equipment then you can opt for a machinery loan, if you need to pay out wages or want to expand your existing business then you can go with working capital loan. When you know about such options, these always work the best when you Apply For Business Loan. Always research them one by one and opt for best suited at last.

THE RIGHT LENDER: When you are trying to plan for a loan, you will come across many lending institutions offering number of benefits. But if you really want to secure best option, it needs sometime. You need to research for various lenders by going through their websites, customer reviews on their portal. Always compare them on the basis of interest rates, quantum offered and tenure to repay the loan. ShubhBank is trending lending institution who provides Online Business Loan to fulfill all your requirements.

DOCUMENTATION: When you apply a loan, every lender will ask you about business’s cash flow to ensure them for repayment. It is every borrower’s responsibility to provide correct documentation to avoid rejection of loan application. Having a robust business layout showing the potential growth and profit can help you to get approved for loan. The other important factor to know is eligibility criteria. Try to opt a lender with minimum eligibility criterion as gathering all the required documents may be tough at that point of time. Some of the documents required are given below:

• Existing business details.
• Previous year’s Income Tax Returns.
• Proof of identity- PAN card, address proof, voter ID etc.
• Last two years bank statement.
• Commercial and residential property documents.


At last, selecting a right business loan is important for every business’s success. So be a smart, choose the best loan product available in the market and make an informed decision. Hence, a right financial partner can contribute to your growth in business.


Feature Image

APPLY FOR BUSINESS LOAN ONLINE TODAY!

Posted on Friday February 21st, 2020

If want to business for yourself or working who was the new plan but do not have the capital you need to invest in your work then a business loan is the perfect solution for you. What people complain about while thinking about business loans is that they might get cheated or about the Business Loan Interest Rate or the loan processing time will take months while they lose out on their dreams. No more do you have to face problems as you can apply for a business loan online nowadays.

Eligibility criteria for applying for a business loan

First and foremost you must check the Business Loan Eligibility to see if you stand a chance to even apply for taking out a loan. The eligibility criteria can differ from company to company but some of the basic criteria are as follows:

● Self-employed individuals who are both professionals and non-professionals can apply. Self-employed professionals mainly included doctors, architects, chartered accountants, etc cetera. Self-employed non-professional includes individuals who are traders and manufacturers, etc.
● Entities can also apply for a business loan. They include partnerships, private limited companies, limited liability partnerships, etc cetera.
● The companies who are giving out the loan may ask the businesses to prove that they are making a turnover of 40 lacs minimum per year.
● a minimum of 3 years of experience in the current business must be required for which the loan is taken out.
● One must also have a minimum of 5 years of total business experience.
● The business must also be profitable and one may be asked to provide the details for the past two years.
● The minimum annual income must be not less than 1.5 lacs per annum.
● The applicants must be at least 25 years of age and cannot be more than 55 years.
● The IT returns for the past 1 year must be filed properly.
● Lenders can choose to offer to give out the loan depending upon your geographical area as well. Check if such clauses are mentioned by the company from which you will seek out your loan.

Documents you have to produce to be able to apply for a business loan:

● The PAN card for the company, individual or the firm.
● Photo identity proof
● Address proof
● Past 6 months bank statement
● The latest income tax return along with the income balance sheet that has been computed which will also have the profit and loss account for the last 2 years.
● Proof of continuation is also required
● Certified copy of the partnership deal of your company or the sole proprietorship declaration.
● You may also have to produce the certified true copy of the memorandum and the articles of association.

Apply for Business Loan Online from anywhere. No more do you have to stand in long queues and wait for days for your documents to get verified. Just log on to the website and click the business loan option. Fill the details and you will be ready to go.


Feature Image

FEW REASONS FOR BUSINESS LOAN REJECTION

Posted on Friday January 17th, 2020

A business loan is a boon for small businesses and start-ups but rejection on this loan is a matter of financial nightmare. In recent times, the number of approvals on corporate loans has decreased drastically due to the risks attached to it such as NPA has made lenders more and more harsh and cautious towards the approval of application. So ShubhBank is here to enlist Few Reasons of Business Loan Rejection you have to take care to apply for business loan.

Poor Credit History: Lenders always evaluate your business credit score while deciding on your loan application. If you have any negative remarks on your credit report then it may directly lead to rejection of your loan application. So a good credit rating is utmost for direct approval of your loan whereas low credit score increases the chance of rejection or you may end up in paying higher interest rates on loan quantum.

Lack of Collateral: A high quantum business loan is a secured loan which means these loans are usually backed by some collateral. The value of loan money is directly proportional to the value of collateral or security. If you default on repayment then lender has right to use that collateral to recover their loan money from it. However, in case of new ventures, it is more difficult to Secure a Business Loan as they do not possess any assets.

Overall Business Turnover: The overall turnover of your enterprises is one of the key parameters that come into play when lenders decide on your loan application. The evaluation of cash flow in your business will determine your repayment capacity and in case of poor cash flow, lenders will reject your loan application.

Age of Business: Most of the lenders evaluate the duration for which your business or organization has survived in the market while sanctioning the loan application. Every lender looks for at least three years of business presence to approve your business loan in one go. Apart from this, you are also asked for two years of IT returns to ensure the profit consistency of the firm.

Somethings to keep in mind after rejection of your business loan
• First and foremost, evaluate and figure out the reasons why your loan application was rejected. If the reasons are rectifiable then correct them at the earliest and re-apply for business loan.

• Secondly, the rejection of your loan application may adversely affect your credit score. You must exercise in building up your credit score as early as possible as it will determine your future credit capability.

• Lastly, you may consider a searching for other funding options can be taken other than a loan from traditional financial institutions.

Getting a business loan is a great step towards extending or growing your business and they are usually ideal for meeting your working capital needs or upgrading the new machinery for operation units. Taking above mentioned reasons in consideration, you can get an instant e-approval on your business loan from ShubhBank after successful submission of your loan application.


Feature Image

BUSINESS LOAN FEATURING YOUR SUCCESS

Posted on Thursday March 29th, 2018

ShubhBank offers affordable business loans for small and medium sized enterprises with the view to address their working capital requirement. Business owners and entrepreneurs can fulfil their business expression goals and meet all their working capital needs using the ShubhBank business loan. Our loan is designed in such a way that they suits the needs of most businesses that are looking for funds to help them operate and grow. It can be uses for a variety of purposes by the company. They can either be used to fund expansion of current operation or to provide resources for new projects that a company may wish to take up. It can also be procured by enterprises engaged in manufacturing, services, retail or wholesale trade activities. Self employed professionals and individuals, closely held limited companies, private limited firms or eligible to “Apply For Business Loan“. Our bank offers various facilities that can range from easy repayment options to doorstep service. We also offer quick approval times and minimum documentation to make the loan easier to take.