Present day trading involves heavy
initial investment and pooling in continuous financial resources. Banks
are providing trade loans to traders / businessmen to help them set up
or expand their business.
Maximum Loan offered by Banks for Trade Loans:
The minimum
loan offered by banks is Rs.25000,it can be extended up to a maximum of
Rs. 100 lakhs. The amount of loan also depends on the age of the
applicant, his financial standing, his ability to repay the loan and the
tenure of loan. Trade loans is repayable in maximum 5 years through
Equated Monthly Installments or EMI.
Interest Charged by Bank on Trade Loans:
Interest is fixed on
the basis of prime lending rate. Rate of interest can vary in different
banks due to the policies, it can be on fixed or floating rate.
Documents Required for Trade Loans:
- Proof of business existence for at least two years.
- Financial Statements including Balance Sheet and P/L statement
for the last three years
- Proof of residence
- Proof of place of business.
Security for obtaining Trade Loans:
Some banks require the
borrower to furnish collateral security in the form of mortgage of land
(not agricultural land) and building.
National Savings Certificates, Government Bonds, Bank's Term Deposits,
Assignment of Life Insurance Policies, approved shares & bonds
standing in the name of the borrower/proprietor/partner/director only,
are also acceptable as security.
List of Some of Banks Offering Trade Loans:
