How to Negotiate Business Loan Offers?

Business Loans in India are a great way of taking your business forward. There are a lot of banks in India that provide Small Business Loans, Term Loans, Working Capital Loans etc. Based on what your business requirement is, one can easily apply for one and get funded for their business. With business loan, you can expand your existing business, start your own start up, fund the marketing and advertising campaigns for your business etc. Here at Paisabazaar.com, we have a detailed analysis of how one can negotiate their business loans and the different alternate to it.

Tips for Negotiating Business Loan:

Here are a few tips as to how you can negotiate your ideal Business Loan:

1. It is important to establish a negotiation strategy first

Before you take the final step, it is important to know where you can have a strong point. You need to determine what aspects of the financial arrangement remain highly important to you which is non-negotiable, what can be negotiated and what is that you can give up easily. Once you decide these factors, you can create a negotiation strategy and implement it further

2. Know the risk profile of your Business

You need to identify what remains the weakness and where it may cause a trouble to your financier. Rectify the errors which in turn can become a big problem. Once you know where you can afford to risk your business, after that you can talk with your financier accordingly.

3. Negotiate the Interest Rate Payable

When you apply for a Loan, you need to choose between Fixed or Floating Interest Rate of your business loan and since interest rates have a huge impact on the monthly payment it is always better to negotiate the lowest rate possible.

4. Get rid of unnecessary Expenses

While you will try and negotiate for your business loan, a majority of people will look to save money wherever they can. To earn money, customers will look for business and to get the right business from them, they will try and cut out the unnecessary expenses involved. So, one can try and curb the expenditure where it is not required.

5. Know about Prepayment Penalties

While applying for a loan, most of us do not understand the common terminologies and tend to pay a lot more on the overall loan itself. Be aware of the basic terms so one pays only what is required and not more. There might be some prepayment penalty that you would want to know before you apply for a Business Loan.

Some Top Banks in India offering Business Loans:

There are a number of Indian banks that provide business loans to entrepreneurs. Here are a few of them with some basic details on business loans:

1. HDFC Bank:

HDFC Bank offers business loans for individuals who wish to expand their existing business or want to start from the scratch. The bank offers a lot of benefits related to their business loan product.

• HDFC Bank offers business loan up to Rs 50 Lakh, where one can easily cater to their day to day business needs
• Special Benefits on business loans like over draft facility and flexible loan tenure options
• HDFC Bank offers individuals to check the eligibility of business loans in 60 seconds
• The interest rate of business loan of HDFC Bank varies in the range of 15.65% to 21.20%
• Loan Tenure ranges from 12-48 months
• HDFC Bank also offers balance transfer facility where one can easily transfer their existing business loans to HDFC Bank with interest rates as low as 15.75% on the existing loan transfer (Terms and Conditions Apply)
• Individuals with minimum 21 years of age can apply for a business loan from HDFC bank
• The business should have a minimum turnover of Rs 40 Lakh

2. Axis Bank:

Axis Bank offers collateral free business loans for individuals who are keen on expanding their business. They have catered business loans for people who are also in the profession of Chartered Accountants, Engineers or even Doctors for that matter.

• No collateral is required for Axis Bank business loans
• Axis Bank offers Loan amount up to Rs 50 Lakh for business loan
• Minimum business turnover should be Rs 30 Lakh to Rs 1 Crore
• Individuals in the age group of 21-65 years can apply for a business loan from Axis Bank
• The interest rate of business loan is determined on the assessment of the business profile, credit history and track record etc.
• Self-employed business individuals should be in the business industry for atleast 3 years

3. Kotak Mahindra Bank:

Business owners will always look for opportunities to multiply their business in different fields. With Kotak Mahindra business loans, one can easily avail business loan and grow their business without hampering their personal investments and funds.

• Avail Business Loans from 3 Lakh up to Rs 2 Crore
• Self-employed business people with an annual turnover of Rs 2 crore can apply for this loan
• Manufacturers with an annual turnover of Rs 1 crore can apply for a business loan from Kotak Mahindra Bank
• The loan applicant has to be in the business for at least 3 years with cash profit for the past two years

4. ICICI Bank:

ICICI Bank’s Working Capital Loan is designed to meet the Working capital needs of individuals looking to invest in their businesses.

• ICICI Bank offers flexible collateral loan options and can accept Residential/Commercial/Industrial Property and Liquid securities as collateral
• Companies from Sole Proprietorship firms, Partnership Firms, Private Ltd company and Public Ltd Company can apply for a business loan from ICICI Bank
• The interest rates of the business loan depend on the assessment of the loan applicant, repayment capability, Loan Amount and tenure of the loan.

5. State Bank of India:

State Bank of India offers Simplified Business Loan for building up current assets and fixed assets for business purpose.

• The Loan Applicant should be in the existing business for at least 5 years in the same locality.
• Maximum Loan Amount for Business Loan from State Bank of India is less than Rs. 25 Lakh
• The target group for Simplified Small Business Loan is business units engaged in manufacturing, services activities along with self-employed and professionals, wholesale/retail traders
• The Loan Applicant should be current account holder at any bank for at least 2 years

To apply or compare any of these business loans, you can study the specifications at paisabazaar.com , compare the interest rates of business loans and accordingly apply to what suits your business requirement.

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