Business Line of Credit Loan Application in India

Line of Credit India Offers:

The traditional lenders like banks and NBFC offer Line of Credit primarily in two forms. They are secured and unsecured. The very nomenclature of the type of advance is indicative of its basic features, but it is imperative to learn about it in greater detail to have a clear insight into the nature of the line of credit loan you are getting into.

• Secured Line of Credit: It is a type of advance where you pledge your asset as security for availing of the facility. By the very nature that the advance is covered by adequate security, allows the lender whether a bank or the NBFC, to offer liberal and lower rates of interest considering that the risk is lower in case of default and there would be ample opportunity to recover the outstanding advance amount by liquidating the security.
• Unsecured Line of Credit: As the name suggests, there is no collateral involved as security, thus endowing the advance with a greater amount of risk. The interest charged in such a facility is higher considering the recoverability factor being low in case of default. Notwithstanding the risk factor, our working capital loans at Lendingkart are unsecured by nature. We also offer the business line of credit at Lendingkart on easy terms and approval is granted in 3 days time once the documentation process is successfully accomplished by you.

Advantages of Line of Credit (LOC):

There are various ways in which the line of credit is described in India. It can also be termed as overdraft facility by the nature of transactions in the operation of the facility. Needless to mention, there are a host of advantages liked to this form of a line of credit India offers to the borrowers.

• Rate of Interest: There are two features in the rate of interest charged in the line of credit. Firstly, the rate is comparatively lower than the traditional loans on offer. Secondly, the loan outgo is lower considering that the service of loan is only to the extent of the fund used and not the entire sanctioned amount.
• Use of Funds: Irrespective of the amount of line of credit sanctioned, you are free to use only the exact requirement to meet the fund’s crunch, unlike a loan, where you are disbursed the entire amount of loan sanctioned to be repaid in agreed upon EMI and tenor.
• Low Risk: It is crucially advantageous to the SME sector who can draw smaller amounts, thus being burdened with lower liabilities and the possibility of easy liquidation, thus ensuring the continuity of business.
• Better Choice: The advantage of LOC is its convenience for self-employed. It is far better than a personal loan which also offers a similar solution, but at a higher cost. It is therefore better both in terms of flexibility and cost.
• High Limit: Most lenders offer a higher limit to borrowers seeking a line of credit than a loan considering the factors involved and viability of the business for an ensured continuity.
• Mental Peace: The line of credit is of immense mental peace to you, as you are sure of the source of an emergency fund in the account which will enable you to ensure continuity of business. It is the easiest way to cope with the cycles of upheavals encountered in sales and revenues that is an inherent part of any small and micro-enterprise.
• Easy Application Process: Most of the lenders offer an easy mode of application, more so at Lendinkart, who pride in the fact that they offer a digital interface that is not only robust, but also user-friendly at the same time. At Lendingkart, we are more than happy to host you with an assurance to process the loan in three days time once you have completed the online submission fully.
• Continued Ownership: The basic advantage provided by Lendingkart in their Working Capital Loan as they refer their line of credit, is that you do not have to liquidate your assets or reduce your equity to meet the fund’s crunch. Their LOC ensures a perpetual cash flow to meet the finds necessity at required intervals.

Eligibility for Line of Credit:

The line of credit facility is extended by all the lenders in India and the terms are well suited for the target audience. However, while seeking an instant line of credit online, there are a few cardinal points that you need to bear in mind. One of the major acts on your part is to make a realistic analysis of your fund requirement in the long run in alignment with your business strategies. A considered approach commensurate with your needs ensure the sanction of your proposal without much hassle rather than get rejected with grandiose plans. Lendingkart has a liberal norm of eligibility criteria which at best can be termed as relaxed.

The primary parameters for eligibility are:

• The business mandatorily must be in operation for more than three months.
• The minimum qualifying turnover required is Rs. 90,000 during the last three months from the date of application.
• The location of the enterprise should be excluded from the negative list at Lendingkart.
• It is important to note that Trusts, NGOs and Charitable Institutions are excluded from the list of eligible entities for the benefit of working capital loan or line of credit at Lendingkart.