Articles

Bank business loans

Banks have become an important part of life today, as people cannot think of living without a bank. Starting from a mere financial institution, banks have transformed into an entity that touches common man\'s life everyday. This is because, in addition to the role of a Lending institution, it is considered to be a safer place to even park money by most of the people. Once Banks were considered to be an institution which is accessible to only the upper Middle class income people, but today banks are able to meet the needs of people belonging to various sections of the society.

 

Business Loans:

 

Banks provide Loans to address the various needs of the people like purchase of Land, Construction of House, Purchase of Vehicle for both commercial and personal use, Purchase of any Consumer Durable Item, New Business Launch, Expansion of an existing Business etc. Among all these products, Banks consider Business Loans as an important part of the product portfolio. In this Globalised economy, there are ample opportunities to start and run Businesses and transform into successful ventures. This has made to have a huge demand for Loans for starting a New Business or expansion of an existing business operation.

 

Procedure for Business Loans:

 

Most of the Banks have formed a separate division to address the needs of Business Loans, as it requires a different kind of assessment compared to other kind of Loans. This is especially important, if the loan is for a new business Venture. The individual in need of Loan for starting a Business approaches the Bank.

 

The bank requests the individual to submit a detailed Business plan, with details on the initial investment required, the technology, the market and growth opportunities etc. The Bank will study the Business Plan in detail and assess the risk and return involved in the Business Opportunity. Once the Bank is convinced that the Business plan is solid and the Individual is capable of running the Business with the Team, the Bank sanctions the Loans. The Banks will monitor the progress of the Business and it will formulate the repayment method.

 

Type of Business Loans:

 

Under the Business Loan product portfolio, banks have got various schemes to suit the various requirements especially for running an Existing Business. The Banks gives loans for working capital to meet the short term fund requirements, Loan for any Franchisee opportunity, Dealer Development, Purchase of new machinery or equipment, project financing like making a Green field project etc. The Banks get sufficient business from these customer segments as the overall Business Activity and market opportunities are growing across the world.

 

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