Term Loan
A Term Loan is a structured form of financing provided to businesses and individuals for a specific purpose, with a fixed repayment schedule over a defined period. It is ideal for funding business expansion, purchasing assets, or managing long-term capital needs.
Features of Term Loan:
- Loan Amount: Based on business requirements and financial eligibility.
- Interest Rate: Fixed or floating rates as per lender’s policy.
- Repayment Tenure: Typically ranges from 1 year to 10 years.
- Collateral: Can be secured or unsecured depending on the amount and lender.
- Processing Time: Quick disbursal for eligible borrowers.
Types of Term Loans:
- Short-Term Loan: Duration of up to 3 years, useful for working capital needs.
- Medium-Term Loan: Ranges from 3 to 5 years, commonly used for business expansion.
- Long-Term Loan: Repayment tenure of over 5 years, used for capital investments.
Eligibility Criteria:
- Stable business operation for at least 1-2 years.
- Satisfactory credit score and repayment history.
- Minimum turnover criteria as per lender requirements.
- Business registration and valid documentation.
Documents Required:
- Identity and address proof (Aadhar, PAN, etc.)
- Business registration certificate
- Bank statements (last 6-12 months)
- Income tax returns (last 2-3 years)
- Financial statements (if applicable)
Benefits of Term Loan:
✅ Helps in long-term financial planning ✅ Structured repayment ensures financial discipline ✅ Fixed tenure reduces uncertainty ✅ Boosts business growth and expansion ✅ Competitive interest rates with flexible options
Who Should Apply?
- Entrepreneurs and businesses seeking funds for expansion.
- Manufacturers and traders needing funds for machinery or raw materials.
- Service providers looking to scale operations.
- SMEs and large enterprises requiring capital investment.
Government Schemes for Term Loans:
- Stand-Up India Scheme – Provides funding to SC/ST and women entrepreneurs.
- CGTMSE Scheme – Offers credit guarantees for MSMEs.
- MUDRA Loan Scheme – Supports small businesses with collateral-free loans.
A Term Loan is a powerful financial tool that helps individuals and businesses achieve their financial goals with structured repayment. Whether you need capital for expansion, asset purchase, or working capital, a term loan provides the flexibility and support to grow efficiently.