What are the types of Small Business Loans?

Small business loans are meant for small business entrepreneurs. There is no dearth of options when it comes to loans for small businesses in India. Banks, government and even other large business organizations grants loans for small business set ups on India. But each type of small business loans has its own set of unique features.

Types of small business loans

Listed below are the different types of small business loans offered in India.

●    Micro loans- Micro loans are the most popular form of small business loans in India. The loan amount granted for the loan depends on various factors but the term for repaying the loan is usually up to 6 years. Anyone who has a good knowledge of business and aims to make a profit from their business plan can apply for micro loan.

●   Loans from Banks- Banks also grant loans of different amount for small business institutions. But the banks provide loans only to small business institutions that prove to be promising and are destined to make profits. If the business institutions can’t prove their worth to the bank, availing loan might be a tough task. There are different ways of availing a small business loan from banks including requesting for credit, requesting for partnership, request for assistance.

●     Loans from large business houses- The only way a small business institution can avail loan from a large business house is that if they do it on the basis of a partnership. These large business houses consider a lot of factors such as the location of the small business, kind of business and the growth potential before granting the loan on partnership basis.

●  Government Loans- The government has always been helping small business entrepreneurs by granting small business loans. The government requires certain documents in order to grant the loan to the small business house. The government also offers small business loans for elderly people and minority people.

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Created on Dec 31st 1969 18:00. Viewed 0 times.

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