Identify the need

• Decide what the loan is for (inventory, payroll, expansion, equipment). Size the amount and preferred tenure.

Choose the right product & lender

• Compare banks, NBFCs, fintechs, and govt schemes for interest, tenure, fees, and speed.

Check eligibility

• Lenders look at business age, turnover, profitability, credit score (business & owner), sector, and documents.

Prepare documents

• Common docs: identity & address proof of owners, business registration, GST/Tax records, bank statements (usually 6–12 months), profit & loss / balance sheet, invoices, and KYC forms. Collateral docs if pledging assets.

Apply

• Submit application online or at branch with documents and requested statements.

Lender does underwriting

• They verify documents, check credit history, run cash-flow analysis, sometimes do site visits. They may ask questions or require additional docs.

Sanction & terms

• If approved, lender issues a sanction letter detailing sanctioned amount, interest rate (fixed or floating), tenure, EMIs or repayment schedule, fees (processing, prepayment), and security/collateral terms.

Sign agreement & disbursement

• Sign loan agreement and provide any required collateral/guarantees. Lender disburses funds (one-time or in tranches).

Repayment

• You repay as agreed: monthly EMI, bullet repayment, or via a rolling facility (for lines of credit). Keep paying on time to avoid penalties and hit a good credit score.

Closure