Business Line of Credit (LOC)

A Business Line of Credit (LOC) is a flexible financing option designed to support your business with varying financial needs. It provides access to a pre-approved credit limit, allowing you to withdraw funds as needed. Unlike traditional loans, interest is charged only on the amount used, making it a cost-effective solution.

An LOC for business offers flexible borrowing to manage cash flow, inventory purchases, or seasonal expenses. You can easily apply for a business line of credit online through a simple process. It offers competitive interest rates and flexible repayment terms for quick and reliable access to funds.

Here’s a quick overview of how a credit line for business works:

Credit Limit Approval

Lenders evaluate your business's creditworthiness, financial stability, and collateral (if required) to approve a credit limit. This represents the maximum amount you can borrow at any given time.

Accessing Funds

Once approved, you can withdraw funds up to the assigned credit limit whenever necessary. This flexibility is great for meeting short-term financial needs. It helps with buying inventory or handling seasonal cash flow issues.

Interest Accrual

The interest rate for a business line of credit is typically charged only on the utilised amount. For example, if the credit limit is ₹10 Lakhs, and you borrow ₹2 Lakhs, the lender charges interest only on the ₹2 Lakhs.

Repayment and Revolving Feature

As repayments are made, the credit limit is replenished, allowing you to borrow again without reapplying. This revolving structure gives you continuous access to funds. It is a reliable tool, like an unsecured business line of credit.

Draw and Repayment Periods

A business line of credit generally has 2 distinct phases:

• Draw Period

You can withdraw funds as needed during this phase

• Repayment Period

Once the draw period ends, you repay the outstanding balance, with no further withdrawals permitted

Here’s everything you need to know about the key features of a business line of credit:

Quick Borrowing

You can access funds instantly, often up to ₹2 Lakhs, to address immediate financial requirements.

Zero Processing Fee

Get a business line of credit online with no additional processing charges, ensuring cost-effectiveness.

Conversion to Loan

Convert the credit utilised into an EMI-based loan with flexible tenures such as 3, 6, 9, or 12 months.

Minimal Documentation

Applications require only essential personal and professional documents, which can be submitted online.

Grace Period

You can often enjoy a grace period of up to 5 days each month. This allows you to pay dues without facing penalties.

Here’s a breakdown of the interest rates and charges for a business line of credit on Bajaj Markets:

To qualify for a business line of credit, you must meet eligibility criteria demonstrating business stability and financial health.

Here are the details:

Business Type

Your business must be a proprietorship, partnership, private limited company, or other recognised legal entity

Business Vintage

Most lenders require your business to have been operational for at least two years to demonstrate stability

Age of Applicant

You should typically fall between 21 and 65 years

Self-employment Status

You must be self-employed and actively involved in managing the business

To get a business line of credit, you must provide the following documents:

• KYC Documents
  

  • PAN card
    

  • Aadhaar card or any government-issued identity proof
    

• Business Proof
  

  • Udyam Aadhaar certificate
    

  • GST registration or equivalent business registration documents
    

• Additional Business Proof
  

  • Financial statements
    

  • Bank statements
    

  • Other documents showcasing your business's operational and financial health

Once you’ve gathered the required documents, submit them along with your business line of credit application for quick processing

With the online business line of credit available on Bajaj Markets, you can quickly apply from the convenience of your computer or mobile device. 

Just follow these steps:

1. Click ‘Apply Now’ on this page
   

2. Fill out the form with your essential personal and business information to initiate the process
   

3. Choose a lender from the options available on Bajaj Markets that best suits your financing needs
   

4. Specify the required credit amount and select a repayment tenure that aligns with your business goals
   

5. Complete the application process by submitting the form online for quick processing

Once submitted, your application will be reviewed, and a representative will contact you to complete the process.

Here are the different types of lines of credit available:

• Personal Line of Credit

A flexible loan option for individuals, which allows borrowing up to a set limit for personal expenses. It can be secured or unsecured.

• Home Equity Line of Credit (HELOC)

A type of credit line secured against the equity in your home. It offers a revolving credit limit and typically lower interest rates due to the collateral.

• Business Line of Credit

A credit line tailored for businesses to cover short-term expenses or manage cash flow, offering flexibility in borrowing and repayment.

• Overdraft Facility

A type of credit that allows an individual or business to withdraw more money from their bank account than is available, up to an agreed limit, to cover short-term cash flow issues.

• Student Line of Credit

A credit option designed to assist students with tuition, living expenses, and other educational costs, often offered by financial institutions with favourable terms for students.