Canara Bank is one of the leading public sector banks owned by Government of India. The bank provides lending and financial products with added benefits. Business loan is provided by the bank in form of MSME loans at an affordable interest rate. The offered business loan interest rates depend on various factors, such as loan amount, repayment tenure, probability of the funds to return, a function of the firm, enterprise’s financial history, credit score, etc.
Canara Bank Business Loan – Features & Eligibility
| Canara Bank Business Loan for MSMEs & Start-ups – 2021 | |
| Interest rate | 9.20% onwards |
| Age Criteria | Minimum 20 years & Maximum 50 years |
| Loan Amount | Minimum Rs. 10 lakh & Maximum Rs. 200 lakh |
| Nature of Loan | Term loan, working capital & Non-fund based limit |
| Purpose | Working capital requirement & capital expenditure |
| Repayment Tenure | From 1 year to 7 years |
| Security | 50% of loan amount by way of land/building/securities/bank deposits/ |
| Margin | Minimum 20% – Term Loan Minimum 25% – Working Capital |
Types and Categories of Business Loans
Canara Bank offers business loan in various categories, such as Term Loan, Working Capital Loan and Pradhan Mantri Mudra Yojana (PMMY).
1. Term Loan
Term Loan is offered for purchase of any land, building, machine or vehicles with working capital finance, as one of the elements of the term loans. These loans are offered to industrial and non-industrial lenders for activities that they carry under manufacturing, processing, or repairing any part of their function of the organisation. Along with that the marketing activities are also included in the loan providing activity. The firm is to depict the technical, as well as economic growth while accepting the loan. The loan is prolonged in various ways like rupee loans, foreign currency loans and Deferred Payment Guarantees (DPG). The interest rate offered by Term Loan depends on the elements of the loan, the performance of the activity, risk analysis, reimbursement time and the formulation of the debt remaining to pay. The securities demanded are based on the risk analysis of the loan and the account that the lender holds.
Documents required
- KYC: Aadhaar Card, Pan Card, Passport, Driving license.
- Partnership Organisation: Identification proof of the organisation and the Pan Card of organisation; Office Address Proof, Partnership Certification
- Income Documents like the three-year ITR document of the borrower and other associated lenders
2. Working Capital Finance
Working Capital Finance is offered for the present property like the raw material, shops, semi-finished goods, final products etc. These funds can be used to help in the present functioning of the firm like presenting the salary to the employees, adding to the raw material and the other equipment for the organisation to produce the final products etc. The need of the specific type of loan is analysed by different methods like, Turnover Method, Maximum Permissible Bank Finance (MPBF) System, Cash Budget System as per the function of the organisation. The security that the bank needs for the amount being lent depends on the purpose of the activity of borrowing money. Risk assessment is also a key factor in deciding the security. The interest rate in a similar manner depends on the risk assessment, pending debts, element of the loan, and the functions of the firm.
Documents required
- KYC: Pan Card, Passport, Aadhaar Card, Driving license, etc.
- Partnership Firm: Identification proof of organisation’s pan card and the office address proof with the partnership Certificate of the Partnership Firm
- Documents of the income that is earned by the firm with debtors and creditors certification and GST return and CA certificate. Past three years ITR documents are also required by any kind of organisation
Also Read: How do I apply for a working capital loan? What are the various interest rates?
3. Pradhan Mantri Mudra Yojana (PMMY)
The Yojana is developed for helping the MSMEs to grow in producing, trading and in the service sectors. The loan amount offered under this yojana is minimum Rs. 50,000 and maximum up to Rs. 10 lakh. The eligibility criterion that comes under this scheme is the past 2 year’s documents of the financial status of the lender and the organisation capacity. For the new consumers it basically depends on the feedback of the market and the response that the target consumers will deliver. The reimbursement of the amount can take place between 5-7 years with the monthly instalments or as per the borrower’s convenience. Security required for this loan are the collaterals belonging to the borrower only and collateral is to be mobile or immobile with the current organisational material too that fills in the loan amount. The interest rate for the same depends on the loans that fall under the MSME category.
Also Read: How to apply for Pradhan Mantri Mudra Yojana Online/Offline
How to Apply for Canara Bank Business Loan with Paisabazaar?
The application process for Canara Bank Business Loan with Paisabazaar involves the following steps:
Step 1: Visit Paisabazaar.com to check and compare loan options from Canara Bank
Step 2: Pick the required scheme by filling and submit the loan application form
Step 3: Submit the documents along with the loan form for bank to verify them
Step 4: After verification, the bank shall approve the loan
Step 5: After the loan is approved, the bank shall disburse the loan amount in the applicant’s bank account
Must Read: Top Government Loan Schemes for Small Businesses in India
Canara Bank Business Loan toll-free number: 1800-425-0018
Frequently Asked Question (FAQs)
Ques 1: What are the interest rates offered by Canara Bank?
Ans. Interest rates offered by Canara Bank under MSME loan category depends on business requirements and applicant’s profile.
Also Know: Business Loan Interest Rates and Charges of All Banks
Ques 2: What are different categories of loans offered?
Ans. Canara Bank offers three major categories of loans: 1. Term Loan, 2. Working Capital Finance and 3. Pradhan Mantri Mudre Yojna (PMMY).
Ques 3: What are the documents required for these loans?
Ans. Documents required are the basic documents like identification proof of the individual and the proof of the firm with its address and other regular bills and documents to prove the time period of operation of the firm.
Ques. 4: What is the maximum loan amount offered by Canara Bank for Start-ups?
Ans. The maximum loan amount offered by Canara Bank for start-up is Rs. 2 crore.
Ques. 5: What is the repayment period of the business loan for MSMEs and Start-ups?
Ans. The maximum repayment period for Start-ups and MSMEs is up to 7 years.
Ques 6. What is an MSME loan in Canara Bank?
Ans. MSME loan offered by Canara Bank is a working capital loan or term loan that is used for various purposes like business expansion, meeting urgent cash requirements, maintaining cash flow, buying equipment and machinery, purchasing raw materials, enhancing inventory, paying salaries, rent or training staff.
Ques 7. What are the types of loan facilities available in Canara Bank of Micro, Small and Medium Enterprises?
Ans. Canara banks offer various loan facilities for MSMEs that include Canara Udyog, Canara Vyapar, Canara MSME loan, Doctor’s Choice, etc.
Ques 8. What are the margin norms for loans under MSME?
Ans. The margin norms for loans under MSME vary from loan to loan and depend on the applicant’s profile and business volume.
Ques 9. What is SME Sulabh in Canara Bank?
Ans. SME Sulabh in Canara bank is the business units across the nation from where applicants or borrowers can get information regarding new or existing SME loans.