Trade Loans

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:

United Bank of India - Trade Credit Scheme
HDFC Bank - Loan For Private Companies & Partnership Firms
Standard Chartered - Trade Services
Bank of Baroda - Baroda Traders Loan

*Terms and conditions may vary from bank to bank.