FAQs Frequently Asked Questions
1. Who can borrow?
Loans4SME is primarily focused on facilitating loan financing for small and medium enterprises. Your enterprise should be a business based in India, and may be structured as a proprietorship, partnership, LLP or a limited company. You can be from any sector or line of business.
2. How much can I borrow?
The amount you can borrow is determined by your requirements, your ability to repay out of your business cashflows and the lenders’ interest. When you apply for a loan at Loans4SME, please specify the amount you think will meet your financing requirements. The amount of financing you get will be determined by the lenders, based on their evaluation of your company and expected cashflows. Typically, our borrowers request for loans between INR 20 lakhs -25 crores.
3. What form and structure is this loan in?
Loans4SME works with a network of 50+ lenders who offer a wide range of products and structures that can be customized to meet your growth capital and working capital requirements. The final structure will be mutually negotiated between you and the lender. Please refer to our Products page for the various products and structures in which the loans are offered by our lending partners.
4. What purpose can I borrow for?
You can borrow for growth and expansion of your business and also to manage the working capital cycle of the business, taking into account the seasonality and spurts in demand.
5. Do I need collateral security for the loan?
Unlike a traditional bank loan, Loans4SME offers loans that are backed by your cashflows. You need not provide a collateral security to avail this loan.
6. What duration can I borrow for?
Our lending partners offer loans ranging from short term 3 month loans to 12 year project finance. The maturity of the loan will be mutually negotiated between you and the lender on the basis of your projected cashflows. Loans4SME provides you the flexibility to structure repayment schedules that best suit your business cycle.
7. What is the interest on this loan?
The interest rate you pay on your loan is determined by the current market rates as well as the lender perception of the risk in the company. Loans4SME is a marketplace and does not decide the rate of interest. However, you can request feedback on the expected risk profile of your loan, and the interest rate you can expect to pay, based on our proprietary credit risk algorithms.
8. What other costs will I have to pay?
In addition to the interest rate, you might have to pay the lenders a loan processing fee and legal costs like stamp duty. Loans4SME charges a success fee of 1-2% of the loan amount depending on the complexity of the structure and tenure of the loan.
9. What information do I need to provide?
In order to apply for the loan, you will need to provide KYC documents (incorporation documents and address proof for the company and its directors), as well as details regarding the company’s business, financial statements and funding requirements. For Loans4SME to provide a credit risk opinion based on our proprietary algorithm and for your subsequent discussions with lenders, it will help if you have financial forecasts and a detailed business plan.
10. What is the role of Loans4SME in the process?
Loans4SME is a tech enabled marketplace that makes the process easy and hassle free for both you and the lender. Our team of loan experts helps you identify the best options for raising capital based on your financial position and the funding requirements. We connect you to a wide range of lenders, and once the two parties agree on the transaction, we facilitate the entire process flow to draw down the loan. However, at no stage does Loans4SME act on behalf of either the borrower or the lender. While our technology driven credit risk algorithm provides an indication of the risk profile of the loan, the lenders do their own diligence on your company when deciding on whether to make a loan to you.
11. How will I repay the loan?
You will repay the loan directly to the lender. The repayments can be made either through a cheque or direct fund transfer to the lender’s account.
12. Can I prepay my loan?
Yes, you can prepay your loan. There might be a prepayment penalty charged on early repayment of the loan, which will be communicated to you before you draw the loan.
13. What happens when the payment is delayed?
A delay in repayment of the loan will affect your credit profile, and will make it difficult for you to access financing in future. In the unlikely event of a delayed payment, you will be liable to pay a penal interest and a late payment fee. You will also be liable to legal action for recovery of any defaulted payments. Hence Loans4SME strongly recommends that you only take a loan that you can comfortably service.
14. Can I get a loan if I already enjoy a bank facility?
The loan facility availed on the Loans4SME platform has no connection with the current banking facility. It may be used to supplement or replace a bank facility as it is based on the cash flows of the business and not fixed criteria and collateral that bankers normally look for.
15. How secure is my information with Loans4SME?
Loans4SME has the best in class data protection services and hence the information that is provided by the company is completely safe and never shared with any external party without your express approval.
1. Who can lend?
Loans4SME is a tech enabled lending marketplace that allows a wide range of Indian lenders access to exciting SME loan investment opportunities. Our lenders include banks, NBFCs, venture debt funds and factoring companies.
2. What products can I offer?
Loans4SME team works closely with lenders to understand their product portfolio and find a match with our expected borrower profile. Our lenders typically offer collateral free, cashflow based loans through the marketplace. These loans can be for working capital or for project finance/growth capital.
3. Why should I lend through Loans4SME? Can’t I give a loan to the company directly?
With Loans4SME’s strong network and proprietary credit assessment tools, you get access to a pre-assessed highly curated pipeline of creditworthy borrowers. We handle all the paperwork for you, which means you close transactions faster. Our lending partners typically see a significantly higher conversion rates for borrower pipeline they access through Loans4SME.
4. What rate of interest can I charge on the loan?
The interest rate you charge on the loan may be in line with your existing product portfolio. Loans4SME team can share with you the range of interest rates offered by our lending partners for different products
5. What fees does Loans4SME charge me?
At Loans4SME, we connect you with the right kind of borrowers and provide a hassle free experience with all the document collection and the operating issues taken care of. We may charge a fee for our services to provide access to a curated pipeline of borrowers, document processing and credit evaluation.
6. How many loans can I give on Loans4SME platform?
A lender can give multiple loans on the Loans4SME platform. We advise that you follow a diversified approach to investment and participate in multiple loans instead of concentrating on a couple of companies. We will be happy to discuss your portfolio goals and originate loans based on your specific requirements and capital commitment
7. Can I invest in part of a loan and be a part of a consortium?
Yes, the total requirement of a specific company can be funded by a number of lenders. However, there is a minimum amount that would be prescribed by Loans4SME for each loan that a lender needs to contribute.
8. What is the role of Loans4SME?
Loans4SME is a purely a tech based platform that connects the lender and borrower and charges a fee for the same. It does not lend any money or accepts any monies on behalf of the lenders. The flow of funds is directly between the lender and borrower.
9. What diligence does Loans4SME do on the borrower?
Loans4SME uses a proprietary tech based algorithm to provide an opinion on the risk profile of the company. This opinion is solely based on the facts provided to us. Our role as a lending marketplace is to connect you to the borrower and not to assume any default risk. We highly recommend that you do a thorough analysis of the risks before making an investment.
10. Is my investment safe? What if the borrower defaults?
Loans4SME connects you to borrowers with a wide variety of risk profile, depending on your investing goals. We always recommend that you make your investment decision after taking into account all the risk factors. That said, Loans4SME team comes with a long history of credit experience and we will always ensure that we showcase genuine borrowers with an intention and capability of repaying the loan on time. In the unlikely event of a delayed payment, Loans4SME team can facilitate the collection of late payment fee and penal interest from the borrower, and even connect you with the appropriate legal resources if needed.
11. What information will you collect from me?
When you sign up with Loans4SME, we will understand your investing goals to make sure we find the right borrowers for you. We will look for information on the sectors, products and the expected risk profile of the borrowers you are looking to lend to so we can connect you to the right set of borrowers.
12. Is my personal information safe?
Loans4SME uses the best in the industry technology to ensure safety of your information. Your proprietary information is never shared with a third party without your express approval.
We value the trust you place in us. That’s why we insist upon the highest standards for secure transactions and customer information privacy. Please read the following statement to learn about our information gathering and dissemination practices.
1. Collection of Personally Identifiable Information and other Information
When you use our Website, We collect and store your personal information which is provided by you from time to time. Our primary goal in doing so is to provide you a safe, efficient, smooth and customized experience. This allows us to provide services and features that most likely meet your needs, and to customize our Website to make your experience safer and easier. More importantly, while doing so we collect personal information from you that we consider necessary for achieving this purpose.
If you choose to buy on the Website, we collect information about your buying behaviour.If you transact with us, we collect some additional information, such as a billing address, a credit / debit card number and a credit / debit card expiration date and/ or other payment instrument details and tracking information from cheques or money orders.
If you choose to post messages on our message boards, chat rooms or other message areas or leave feedback, we will collect that information you provide to us. We retain this information as necessary to resolve disputes, provide customer support and troubleshoot problems as permitted by law.
If you send us personal correspondence, such as emails or letters, or if other users or third parties send us correspondence about your activities or postings on the Website, we may collect such information into a file specific to you.
We collect personally identifiable information (email address, name, phone number, credit card / debit card / other payment instrument details, etc.) from you when you set up a free account with us. While you can browse some sections of our Website without being a registered member, certain activities (such as placing an order) do require registration. We do use your contact information to send you offers based on your previous orders and your interests.
2. Use of Demographic / Profile Data / Your Information
We use personal information to provide the services you request. To the extent we use your personal information to market to you, we will provide you the ability to opt-out of such uses. We use your personal information to resolve disputes; troubleshoot problems; help promote a safe service; collect money; measure consumer interest in our products and services, inform you about online and offline offers, products, services, and updates; customize your experience; detect and protect us against error, fraud and other criminal activity; enforce our terms and conditions; and as otherwise described to you at the time of collection.
In our efforts to continually improve our product and service offerings, we collect and analyse demographic and profile data about our users’ activity on our Website.
We identify and use your IP address to help diagnose problems with our server, and to administer our Website. Your IP address is also used to help identify you and to gather broad demographic information.
We will occasionally ask you to complete optional online surveys. These surveys may ask you for contact information and demographic information (like zip code, age, or income level). We use this data to tailor your experience at our Website, providing you with content that we think you might be interested in and to display content according to your preferences.
4. Sharing of personal information
Disclosure to the Government and other judicial bodies as required under the law in order to comply with the legal obligations (without the prior permission of customers). In the event of merger, amalgamation or acquisition, the data provided to us will be transferred to the third party as the sale may include your personal information.
5. Links to Other Sites
Our Website links to other websites that may collect personally identifiable information about you. Loans4SME is not responsible for the privacy practices or the content of those linked websites.
6. Security Precautions
Your personal details are stored on a secure server that only selected personnel and contractors have access to.
We encrypt certain sensitive information using Secure Socket Layer (SSL) technology to ensure that your personal details are safe as it is transmitted to us.
We take appropriate precautions to protect the security of Personal identity details. You can access your Personal identity details on our Website through your login and password, once your registration process and our verification processes complete. We recommend that you do not share your password with anyone. In addition, your personal details are stored on a secure server that only selected personnel and contractors have access to. We encrypt certain sensitive information using Secure Socket Layer (SSL) technology to ensure that your personal details are safe as it is transmitted to us.
However, you understand and accept no data transmission over the Internet can be guaranteed to be completely secure. We cannot ensure or warrant the security of any information that you transmit to us, so you do so at your own risk.
We provide all users with the opportunity to opt-out of receiving non-essential (promotional, marketing-related) communications from us on behalf of our partners, and from us in general, after setting up an account.
If you want to remove your contact information from all Loans4SME lists and newsletters, please visit: SUPPLY LINK TO UNSUBSCRIBE
On registration, you are also permitted to post your data on our website for advertisement purposes. On termination of registration or on your request, related data will be deleted.
9. Your Consent
10. Additional Information
11. Grievance Officer
In accordance with Information Technology Act 2000 and Rules made there under, the name and contact details of the Grievance Officer are provided below:
Questions regarding this statement should be directed to the following address: [email protected]