Is It Possible to Apply For a Business Loan in India as a Sole Proprietor?

Posted: 24th June, 2021

Updated: 8th February, 2023

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Being your own boss is the dream that many harbor. Having a business idea and developing it into a successful venture involves various challenges and hurdles. One of the primary challenges is having sufficient funds at your disposal to jump-start your business. This is where a business loan comes into the picture.

What is a business loan?

A business loan is a loan that is issued to businesses to meet their financial needs. It provides businesses with the funds necessary to grow and become profitable. As such, business loans are quite popular among businesses.

Benefits of business loans

Business loans have various benefits that you, as a business owner, can avail of. These benefits are discussed below:

Optimal loan amount

Lenders offer an optimal level of financing, thereby allowing you to get the desired funds that your business needs. Hence, whether you need a large sum to purchase new equipment or need a little help with your working capital requirements, you can easily get the required funds.

Different types of loans

There are different types of business loans that are available in the market. You can opt for a specialized loan such as equipment finance, working capital loan, or an SME loan for the general financial needs of the business. Moreover, there are SME unsecured loans as well as secured loans allowing you the flexibility to opt for the most suitable type of loan for your business.

Competitive rate of interest

The rate of interest on the loan is reasonable so that you can pay off the loan affordably, without negatively affecting your business finances.

Easy availability

Both banks and Non-Banking Financial Companies (NBFCs), such as Shriram Finance, offer business loans. Therefore, you can easily find the best source of finance for your business and avail of the loan online or offline at your convenience.

Is a business loan available for sole proprietors?

Business loans finance all types of business, even sole proprietorships. So, as a sole proprietor, you can avail of a business loan to start your enterprise or for its working capital needs.

Shriram Finance offers online SME loans that are simple and easy to avail for your business needs. Here are some of the salient features of Shriram Finance SME loans:

A wide spectrum of loan quantum ranging between 1 lakh and 1 crore rupees.
Interest rates starting from 15%.
Option to avail of an online SME loan or an offline one by walking into any of the company’s branches.
Loan tenure ranging from 12 to 60 months.
Ease of repaying the loan in the form of EMIs.

Eligibility criteria for Shriram Finance SME Loan

Shriram Finance prescribes simple SME loan eligibility parameters for a hassle-free source of finance. The eligibility criteria for Shriram Finance SME loans are as follows:

Business continuity	You should be in the same business for at least the last 3 years
Annual turnover	The minimum annual turnover of your business should be at least 20 lakhs rupees
Registration certificate	You should have a valid registration certificate of the business
Domiciliary status	You should reside at your present address for at least the last year
Age limit	You should be at least 23 years when applying for the loan. Moreover, during the maturity of the loan, your age should not be more than 65 years

Required documents to apply for SME Loan

To apply for an SME loan from Shriram Finance, you should submit the following set of documents:

A copy of your identity proof; a valid proof of identity can be any one of the following:
- PAN card
- Driving license
- Passport
- Voter’s ID card
A copy of your address proof; a valid proof of address can be any one of the following:
- Electricity bill
- Driving license
- Passport
- Gas bill and book
Aadhaar card
Registration certificate of the business
Latest, colored and passport-sized photographs
Other documents that would be needed include the following:
- Proof of income
- Trading and Profit and Loss Account of the business for the last 3 years
- Balance Sheet of the business for the last 3 years
- Bank statements of an active bank account of the last 6 months
- Post-dated cheques and the ECS mandate
- The original documents of the collateral security that you are pledging with Shriram Finance to avail of the loan
Declaration of the credit obligations that you have presently
Proof of permanent residential address if the permanent residence is different from the current one

Procedure to apply for SME loan

To apply for an SME loan, you have two options, which are as follows:

Offline application

You can visit Shriram Finance’s branch offices as a walk-in customer and apply for a quick SME loan. The lender’s executives would guide you with the application process and your loan would be sanctioned after verification.

Online application

The online mode of applying for an SME loan is much easier and convenient. You can visit to apply for an online SME loan. Just provide your details and click on “Apply Now.” Shriram Finance’s executives would get in touch with you and help you apply for an instant business loan.

Benefits of Shriram Finance SME Loan

Shriram Finance’s SME loans are a beneficial source of finance for your business. Here are some reasons why:

Trusted lender

Shriram Finance carries a rich legacy of 43 years in providing financial solutions. The company offers customized loan solutions for your business so that you get a tailor-made loan that suits your business requirements. Moreover, with over 3600+ branches across India, it becomes easier to avail of a business loan.

Flexible loan and repayment

You can avail of loans up to 1 crore rupees, thereby making it easy for you to meet the desired financial requirements for your business. Moreover, the repayment tenure of up to 5 years allows you to pay off the loans affordably in monthly installments.

Personalized solutions

Shriram Finance provides personalized solutions for your business needs. Every loan application is considered independently based on which the loan’s terms and conditions are determined.

Competitive interest rate

The SME Loan ROI charged by Shriram Finance is competitive by industry standards. The interest rate starts at 15%, allowing you to avail of an affordable loan.

Quick funds

Shriram Finance's SME loans are disbursed within the shortest possible tenure so that you can avail of quick funds for your emergency business needs. You can avail of an online SME loan and get it sanctioned quickly.

So, if you are a sole proprietor, you can get loans for your business needs. If you choose Shriram Finance, you can avail of a high loan quantum at affordable interest rates and get a quick disbursal of the loan. Therefore, assess your business needs and then apply for a suitable business loan to grow your business and make it profitable. Moreover, choose the right lender to get the business loan at the best rates.