Factors Deciding Business Loan Eligibility
- Age Limit: The applicant should be min 21 years & max. …
- Income: Business should be profit making at least for the past 2 years.
- Turnover: ₹150,000 p.a. should be the minimum annual income.
- Co-applicants: This is optional to the applicant, not mandatory in case of business loan.
Thereof, can you use a business loan to pay yourself?
But can you pay yourself? Yes, if the funding is there. According to the SBA, operating expenses, besides equipment, raw materials and staff payroll, “include your salary as the owner and money to repay your loans.” Having said that, one major caveat is that you must be cautious in the amount you pay yourself.
Also know, do you have to pay back a business loan if the business fails?
A personal guarantee means that you’re responsible for repaying your loan if your business can’t. Lenders require this as a form of security — even on unsecured loans — to ensure that they will still be repaid even if your business goes under.
How do you repay a business loan?
To repay the debt, you may give the lender a cut of your future debit and credit card sales. With invoice financing, you can get financing based on an accounts-receivable invoice, which you’ll repay when you get the cash payment from the invoice.
When applying for a business loan, you should generally have:
- income statements and balance sheets for the past two years.
- up-to-date financial statements.
- business plans or project plans to show the direction your business is taking.
- tax returns to verify your income statements.
- bank accounts, also for verification.
A small business loan gives you access to capital so you can invest it into your business. The funds can be used for many different purposes including working capital or improvements including renovations, technology and staffing, business acquisitions, real estate purchases and more.
The SBA or your lender will take legal action: If you are not able to repay any money within a certain amount of time, the SBA will go through your business (and possibly your personal) finances. If they can identify money that can be used to repay the loan, they may start legal proceedings.
The lender will set up a reasonable plan for you to pay back the loan. The lender will seize and liquidate your business or personal assets to cover the loss. The lender will cut its losses and settle with you for a defined amount.
Up to a maximum of Rs. 30 lakh can be availed as loan. The loan repayment period ranges between 12 months and 60 months. The lender charges a competitive rate of interest.
Eligibility Criteria for Mudra Loan
The minimum age of the applicant must be 18 years and the maximum Mudra Loan age limit is set to 65 years. Loans can be availed by non-farm income-generating businesses in trading, manufacturing and services. The requirement of credit must be ₹ 10 Lakh or lower.