Best Commercial Banks In India
In the age of commercialization, people are choosing banks according to their financial needs and also looking for those banks who is able to also fulfil their requirements. There are multiple options of commercial banks in India that individuals can apply for the loan such as private sector banks, public sector banks, foreign banking institutions, Regional Rural Banks, and much more.
Features of commercial loans
Commercial loans can be found to a business entity rather than to individual consumers.
It can be utilised by organisations to take care of financial expenses like purchasing equipment, buying and installing machinery, buying office, purchasing vehicles, construction, and renovation of office location, purchasing inventory, and much more.
These loans could be secured and unguaranteed. For secured loan organisation need to provide collateral or security to the lender. In cases like this, the organisation must pay the lower interest levels as the level of risk is low for the lending company.
Commercial loans are provided to an individual for a short period. It could be range between days to 1 year. Sometimes it gives long tenure too but which will depend on the lender.
Commercial loans cover revolving lines of credit, short-term debt, long-term debt, etc. for an individual.
Commercial loans are mostly having fixed interest rates or floating interest levels. If the user has a fixed interest rate then that may remains fixed through the entire tenure period. When you have a floating interest, the interest rate will fluctuate based on the market.
You can repay a commercial loan through post-dated cheques, Electronic Clearing Services (ECS), Standing Instruction (SI), etc. at the time of loan approval.
Commercial loans also help companies in purchasing supplies, funding the production process, handling payroll needs, and more to maintain inspiration.
These loans are sometimes required to offer to self-employed professionals or non-professionals so that it can be easy to purchase property or any other asset of their firms requirements.
The applicants can be lawyers, doctors, engineers, architects, consultants, contractors, etc. and they will have to apply for the loan on behalf of their company.
It can be utilised for expanding company operations too.
Best Public Sector Banks in India
State Bank of India
Punjab National Bank
Bank of Baroda
Union Bank of India
Canara Bank
Central Bank of India
UCO Bank
Bank of Maharashtra
Best Private Sector Banks in India
Axis Bank
Bandhan Bank
HDFC Bank
DCB Bank
Federal Bank
ICICI Bank
IndusInd Bank
IDBI Bank
Eligibility criteria for Commercial loan users
Partnership firms, sole proprietorship firms, self-employed professionals, and non-professionals private limited companies, public limited companies can apply for commercial loans in India.
The business entity for commercial loan users should have a good turnover. But the turnover requirement will differ from lender to lender.
The borrowers should meet the minimum annual income requirement as a firm.
The firm should be in profit for a certain period, which will be mentioned by the lenders.
The minimum age criteria of an individual are and a maximum of years who are applying for a loan on behalf of the company.
The company should be interested in applying for a commercial loan and should have been in business for a certain period which will be fixed by the lender.
Documents required for commercial loans
If you are applying for a commercial loan, on behalf of a firm you will have to compulsorily submit certain documents to the banks and they include:
PAN card for firms, companies, and individuals
VAT, GST, statements for a certain period
Balance sheet
Income tax returns for a certain period
Profit & Loss statement for a certain time
Bank statements
Business continuation proof
Certified copy of partnership deed
Sole proprietorship declaration
Board resolution
Certified copy of Memorandum and Article of Association
Bottom line:
Commercial banks do play an important role for the user to fulfil their short-term and mid-term credit requirements. However, commercial banks do not provide long-term credit for over years or more. The user will get funds at commercial banks that belong to the general public and are withdrawn at a short notice, thus, commercial banks prefer to provide credit for a short period.
