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Business Loan Interview Questions & Answers - Learning Mode

Business Loan Interview Questions & Answers - Learning Mode

A Business Loan is a loan specifically intended for business purposes. As with all loans, it involves the creation of a debt, which will be repaid with added interest. Businesses require an adequate amount of capital to fund startup expenses or pay for expansions. As such, companies take out business loans to gain the financial assistance they need. A business loan is debt that the company is obligated to repay according to the loan's terms and conditions.

Try Business Loan Interview Questions & Answers - Exam Mode


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Business Loan Interview Questions & Answers - Learning Mode
Try Business Loan Interview Questions & Answers - Exam Mode
Question: What documents are needed for a Business Loan?

Answer: There is need of submitting supporting documents while applying for a business loan. There are differences in the documents required for various types of companies like sole proprietorship firm, partnership firms and private limited companies. The documents needed may also vary slightly depending on the bank you have applied for the loan. Generally the following documents are required by banks for providing a business loan for a sole proprietorship firm:-

1. Proof of identity of the sole Source:
Question: If I get my business approved from a rating agency does that increase chances of a loan?

Answer: Yes, technically banks are more comfortable offering loans to business entities with a strong financial background to avoid defaults. Getting rated from a certified rating agency may not be the only criteria but it will help your case surely. Source:
Question: Will bank insist on a collateral security if i opt for a drop line overdraft?

Answer: To encourage business owners, banks are offering unsecured drop line overdraft facility which does not seek any collateral security for offering the overdraft limit. All you need to furnish is a personal guarantee as a business owner as part of security for the overdraft. Banks and NBFCs usually offer unsecured drop line overdraft up to Rs. 50 Lakhs for business owners with a good financial track record. Source:
Question: What is a Fixed Rate Loan?

Answer: In a fixed rate loan the interest rate on the loan charged by the bank is constant over the tenure of the loan. You should go for a fixed rate only if you feel that the rate of interest prevailing in the market have touched rock bottom and the rates can only move upwards. Source:
Question: Why should I take a business loan?

Answer: Banks provide loans to business people for their short or long term financial needs. At various stages of running a business, capital is needed either for long term or short term needs. It is well known that without the required capital no business can be run successfully. For any business whether in initial stage or in growth phase, capital is required to keep up the momentum. Source:
Question: What are eligibility criteria for availing of a business loan?

Answer: Business loans are provided to all kinds of enterprises like sole proprietorships, partnerships and private limited companies. Though income requirements can vary depending on banks, normally net income of the concern should be more than Rs. 150,000 per annum for business loan up to Rs. 15 lakh and over Rs.3 lakh for business loan above Rs. 15 lakh. A maximum of two incomes of the partners or directors holding a minimum of 25% stake each can be clubbed to the income of the concern. Source:
Question: Are there any Foreclosure and Part prepayment charges for Loans with Bajaj FinServ?

1. Nil Part payment charges if the total amount paid in year is less than 25% of the principal outstanding.

2. Part payment charges will be levied on the amount paid over and above 25% of the principal outstanding for the year

Product/Interest/Entity - Business Loan

Foreclosure/Part prepayment charges - 4% plus applicable taxes on principal outstanding*

*For Foreclosure: Current principal outstanding and all amounts tendered by the borrower towards prepayment duri Source:
Question: What is the range of loan amount I can avail of with Bajaj FinServ?

Answer: With Bajaj Finserv, you can avail unsecured Business Loan ranging from Rs.5 lakh to Rs.30 lakh. Source:
Question: What is the range of tenor available with loans from Bajaj FinServ?

Answer: The minimum tenor available for this loan is 12 months and it can go up to 48 months with Bajaj FinServ. Source:
Question: I require some capital for my business and spoke to my bank about the Mudra scheme. The bank manager insists on a collateral security which he shouldn?t under the scheme. Any suggestions?

Answer: Technically, loans under the Mudra scheme come without any collateral security requirements but banks have the right to take a final call in accepting or rejecting the loan request Should the bank not be satisfied with your business plan and considers it high risk, it is free to seek a collateral security. You can either offer a collateral security or improve your business report and reapply after making sure it is foolproof and more balanced. Source:
Question: I am an entrepreneur looking for expansion of business by purchasing new office equipment.
Can i use a term loan to make such a purchase?

Answer: Term loans are a popular choice used by a wide range of entrepreneurs to cater their need for money for business expansion. Usually term loans are offered for acquisition of machinery and fixed assets as well as project expansions. So you definitely go ahead and make office equipment purchase with your term loan. Source:
Question: What is a Floating Rate Loan?

Answer: In a Floating Rate Loan the interest rate charged by the lender keeps changing with respect to the rates in the market over the tenure of the loan. Normally the rate charged is on the basis of their cost of funds and the prevailing market rates. These rates change periodically. Accordingly the tenure increases or decreases or alternatively the EMI increases or decreases based on whether the rates move upwards or downwards. Source:
Question: How can the Credit Limit be increased?

Answer: You can increase the Credit Limit by giving a request letter and fresh documents to support the enhanced amount facility. This is subject to the eligibility criteria at the time of the new application. Source:


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