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How To Apply For An E-commerce Business Loan in India

How To Apply For An E-commerce Business Loan in India

Online businesses have increased like skyrocketing in the current days, and it will never slow down in the coming days. You know very well that online shopping is a time and money-saving deal.

Many attractive deals are shown for the customers on e-commerce platforms, such as occasional discounts, festival season offers, and many more. Online high shopping demand attracts small-scale business people to join e-commerce platforms. Once you enter an e-commerce marketplace, you will have a lot of opportunities to make more money and expand your business.

If you want to become an e-commerce seller, you need capital. Several banks initiated a convincing infrastructure for giving loans quickly, and you can take advantage of this specific e-commerce loan.

Numerous banks assist, through which you can grow your business rapidly. But before taking any step to do research properly on availing of e-commerce loans.

E-commerce loans – Know about

In the coming days, e-commerce will boom in India, and the extra money will be needed to grow and maintain that business. Nowadays, you can avail of e-commerce loans at low-interest rates, and there are numerous apps available to avail loans, buy insurance, and transactions.

That is simple, and several financial companies provide loans at low-interest rates. These loan amounts can be used for different operations, such as expanding your business to buy high-value equipment and many more.

However, if you hire staff for your business, you have to do calculations properly. It is not a complex task; you can manage it with a salary calculator, which helps you in calculations such as allowance, bounce, etc.

How can I apply for e-commerce Business loans?

Starting an online business in India has never been trouble-free. But if we talk about getting an e-commerce loan, there are some facts worth understanding.

In India, initiating an online business has not been easy. Some facts concern if we talk about availing of e-commerce loans.

You can do a lot of online businesses, and in which some can be very profitable. A short time ago, some Indian online sellers expanded their businesses fastly. Opening an online business in India is the right thinking.

A few years ago, banking was not suitable for e-commerce business requirements. But now, the banking system changed.

Also Read: How To Avail A Amazon Seller Loan | Amazon Seller loan in India

What are the key benefits of availing of e-commerce loans

What are the key benefits of availing of e-commerce loans – Let us see

  • Applying for offline e-commerce loans was so tiring for online sellers.
  • There is high competition in online businesses, making taking loans quicker and more efficient.
  • Entrepreneurs in the e-commerce platform can finance and get banking services to save valuable time and other formalities.
  • In India, e-commerce sellers can benefit from and enjoy loans at lower interest rates.
  • Current banks do e-commerce loan processes quicker than traditional loan application procedures.

Features of e-commerce loans

Numerous financial institutions provide particular customized loans for online sellers in India. Let’s have a look at several key features of that specific loans:

  • Interest rates 1.5% onwards
  • Extension of loan value between 1 lakh to 1 crore
  • Monthly & bi-monthly return scheme selection
  • No requirement of guarantee of unsecured loan
  • The loan period ranges from 90 days to 270 days.

Benefits of e-commerce loans

Business loans provide many benefits. You no need much documentation and extend fastly. These types of loans are easy to get and quick to access. But paperwork is a bit crucial for those who are in business.

Revenue stability can be difficult without loans. Repayment flexibility can be done with a fortnightly payment option. Most loans implement to fund working capital and listing management. Both existing businesses and startups can take these types of loans. You can extend your loans quickly in this type of management.

Eligibility criteria for Availing of e-commerce loans

In the olden days getting e-commerce loans from banks and other financial institutions was difficult because eligibility criteria were very hard. Today’s criteria for availing of e-commerce loans have been eased. Now you can take a loan even if you didn’t file your 1st income tax return yet. Below are the eligibility conditions for taking e-commerce loans:

  • It would be best if you had a particular per month income for the business, and it can be different from lender to lender.
  • Your merchandise should have stable availability on big e-commerce sites such as Amazon, Flipkart, Paytm, Alibaba, etc.
  • If you have a good cibil score, you can negotiate favorable tenure.
  • Your business should be registered in your name and at least running for the last six months.
Documents required for e-commerce loans

Documents required for e-commerce loans

Here is the list of required documents the bank needs to proceed loan process:

  • Identity proof – Aadhaar card and PAN card
  • Last six months’ bank statements of your current bank account
  • Residential proof – ration card, voter card, driving license, passport, etc
  • Registered business certificate
  • GST registration certificate

How can you choose the right e-commerce loan?

The selection of suitable e-commerce loans is vital to the success of e-seller in any case. Numerous online sellers fail to grow their online trade because of insufficient amounts of ideas. There is an important point when you choose an e-commerce loan.

Here are:

Before selling online products, you have to research properly to determine the pricing of similar products by competitor sellers. When deciding product prices, sellers must think about all costs related to moving to an e-commerce site.

These include both registration costs and recurring monthly fees. A few additional charges may apply, such as transaction fees, server storage, bandwidth, plug-ins, apps, etc. All of these costs should be considered, and a loan assessment is done to determine the amount to be borrowed.

Loans are easily and quickly repaid

These types of loans required minimal procedure and documentation. The credit value is usually “x” times the monthly revenue of your trade.

It is essential to have a constant revenue to borrow amounts, and it is typically right in the concern of an unsecured loan without surety. You can use inventory as security for e-commerce credit in several matters.

Conclusion

For entrepreneurs planning to start their small-scale e-commerce businesses, an e-commerce business loan can be a hassle-free and fast way of getting the necessary funding. You don’t have to arrange any collateral to avail of such a loan because it’s unsecured. Just ensure to pass the eligibility requirements and maintain an attractive credit score before attempting to avail of e-commerce loans.

E-commerce loans are an easy and quick way to take the required amounts if you plan to start an e-commerce business. You need not show surety to get a loan because it is an unsecured loan. You have to fulfill eligibility criteria and maintain a good cibil score (credit score) before applying for e-commerce loans.

FAQ-Frequently-Asked-Questions

FAQs

1. How to start an online business in India?

Ans: Follow these below steps:

  1. Choose products
  2. Do proper research about your business
  3. Understand e-commerce model
  4. Registered e-commerce business
  5. Buy a domain (website name) name
  6. Choose a good hosting(online storage) provider
  7. Purchase an e-commerce theme for your business
  8. Draft marketing strategy
  9. In last, test and launch your website

2. What are the best e-commerce business ideas in India?

Ans: Here are some ideas for e-commerce business:

  1. Home decoration products
  2. Smartphones and accessories
  3. Digital marketing
  4. Gadgets
  5. Ready-made clothes
  6. Video Gaming accessories
  7. Personal safety pieces of equipment
  8. Computer parts
  9. Jewelry products
  10. Headphones

3. What are the loan approval procedure times for Mudra Finance’s e-commerce loans?

Ans: You can mostly expect these times to be around 7- 10 working days

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