Any firm, be it an MNC or an SME will need additional funds to expand their business. Federal Bank, one of the leading scheduled commercial banks in India, provides business loan to all such firms at affordable rates. The bank majorly focuses on fulfilling the needs of Micro, Medium and Middle market enterprises. Let us explore the various business loan products offered by Federal Bank along with their features and repayment options.
Features of Federal Bank Business Loan
Following are the key specifications of Federal Bank Business loan:
- The bank provides different loan products for all individuals to SMEs and MNCs which suit the financial requirements of everyone.
- Fast process of loan disbursal
- The bank also offers low processing fee
- Attractive interest rates ranging between 8.75% – 9.20%
- Flexible repayment options available
- Minimal documents are needed in order to apply for a Business Loan.
Federal Bank Business Loan products
Some of the important loan schemes available under Federal Bank are discussed below:
SME Parameterised Loan Scheme
This loan scheme focuses on providing the financial support to the entrepreneurs who are either willing to start a new project or want to expand their existing business units. Some important features that cover this loan scheme are:
- The processing of the loan is quick and hassle free
- Cash Credit and BG/LC limits provided for maintaining working capital
- Loan available for Individuals, Firms and Companies involved in manufacturing/trading/service operations
- SME Parameterised loan scheme tenure ranges from maximum 30 months for Working Capital to maximum of 120 months for term loans
Business Loans for Professionals
This business loan scheme focuses on self-employed professionals who wish to set up their own professional services.
- Doctors, Chartered Accountants, Architects having minimum of 4 years work experience are eligible for Business Loans for Professionals.
- The loan amount offered in this loan scheme goes up to Rs.2 crore with loan tenure up to 84 months.
- The interest rates offered on Business Loans for professionals are competitive and easily affordable.
- The loan process along with the approval and the disbursal is pretty quick as compared to other financial lenders.
Federal Goldsmiths Loan Scheme
To promote the Gold and Jewellery industry in the country, the bank has this business scheme that can help the individuals involved in these sectors and help the economy to grow further.
- This business loan scheme offers loan amount up to Rs.5 crore, with terms and conditions set by the bank.
- Federal Goldsmiths loan scheme can be used for expansion of an industrial unit or to fulfil working capital requirements.
- The maximum loan tenure of working capital is one year whereas the maximum loan tenure of term loan is up to 7 years.
- The repayment of this business loan is made through EMI (Equated Monthly Instalments) or through Cheque, Standing Instruction or mobile banking.
General Credit Card Scheme
This loan scheme deals in providing financial assistance to individuals without security since it is unsecured loan.
- Maximum loan amount is 40% of yearly income of the household member or Rs.25,000
- Repayment is to be done within 1 year from date of debit or withdrawal
Loan to Mobile/ DTH/ Other Electronic Recharge Vendors
This loan scheme focuses on boosting business through recharging different vendors.
- Individuals, firms, companies or any legal entity involved directly or indirectly in wholesale/retail distributorship of telecom companies/ DTH service providers or any other electronic recharging products are eligible for this loan.
- Maximum loan amount is 300% of average daily advance paid to telecom company or DTH service provider or wholesaler during the previous one quarter
- The loan can be repaid in maximum 2 years
- It is also available in the form of Overdraft or Demand Loan
SME Loan against Property
SME Loan against property makes sure the financial restraints are met on time with the help of this loan scheme.
- Individuals, firms or companies involved in manufacturing, service or trading can apply for this loan to expand their business.
- Loan can be availed in the following form:
- Term Loan for purchase of machines or construction or re-decoration of office areas
- Working Capital to meet advertisement overheads, acquisition of stock etc.
- Demand Loan to fulfil general administrative expenditures
- Loan tenure varies depending on the loan type. Maximum 30 months allowed for Demand Loan or Working Capital Repayment. In case of Term loan, loan tenure can go as high as 120 months
- Processing charge for SME Loan against Property is 0.50%
- For security, immovable property with 25% margin is taken as collateral
Term Loans for Mid/ Large Enterprises
- Firms having minimum turnover of Rs.500 crores or minimum exposure (Funded and Non-funded) of Rs.25 crores are eligible for the loan
- Loan amount can be used for upgradation of the factory area or technology and machines or purchasing furniture, hardware etc. or substitution of high cost debts from other banks
- Loan repayment period is maximum 60 months.
- Various things taken into consideration for security purpose like mortgage of machinery being financed, immovable properties, bank deposits as collateral, personal guarantee of Proprietors/ partners/ promoters.
- Loan to be repaid in monthly or quarterly or half-yearly instalments or as bullet repayments.
Documents Required for Federal Bank Business Loan
Below is the table for the documents that are required to apply for a federal bank business loan:
|Proof of Identity||Aadhaar, PAN, Voter ID, Driving License|
|Proof of Address||Aadhaar, PAN, Passport, Voter ID, Driving License, Ration Card|
|Income Proof||Last 3 months Bank Statement, Salary Slip of the last 6 months, Income Tax Return for self-employed individuals.|
The bank may ask for more documents according to their terms and conditions and the financial profile of the loan applicant.
Federal Bank offers flexible repayment options. The borrower can repay the loan in any of the following form:
- ECS (Electronic Clearance Service)
- Standing Instructions at branch
- FedNet- Internet Banking
- Mobile Banking
One can easily open an account by applying online via the official website or call the toll-free number to get assistance.
How to Apply for Federal Bank Business Loan
Federal Bank Business Loan offers multiple business loan products that cater to different sections of business aspects. If you are looking for options and want to apply for a business loan, you can visit at Paisabazaar.com where all the comparisons of banks business loans along with interest rate and features are available.
Frequently Asked Questions (FAQs)
- How many business loan products are offered by Federal Bank?
- Federal Bank offers multiple business loan products catering to all the business section of the society.
- SME Parameterised Loan Scheme
- Business Loans for Professionals
- Federal Goldsmiths Loan scheme
- General Credit Card Scheme
- Loan to Mobile/ DTH/ Other electronic recharge vendors
- SME Loan against Property
- What is the mode of repayment in Business Loans?
- One can repay the loan amount either through EMIs, Standing Instruction, Cheque or ECS.
- What is the final interest rate on business loan?
- The interest rate is decided by the bank on the financial profile of the loan applicant. Credit Score plays an important role in finalizing the interest rate along with other credentials.
- For what purposes can business loan be availed?
- Business Loan can be availed for all business related requirements like starting up a new venture, expanding the existing business, to avail extra funds for operational requirements, to start new business related projects etc.