BTL 791 - Pre Approved Business Loan (PABL)

 

The Banking Tutor’s Lessons

BTL 791                                                                  06-06-2025

Pre Approved Business Loan (PABL) 

In the context of banking, PABL stands for Pre-Approved Business Loan. This refers to a loan offered to businesses that have already been assessed and approved by a financial institution, often based on their existing account history and creditworthiness. 

PABLs are a convenient way for businesses to access funding for various needs, such as working capital, expansion, or investments. 

PABL is a type of loan offered by banks to their existing current account customers, typically those classified as Micro, Small, and Medium Enterprises (MSMEs). 

These loans are often pre-approved based on the customer's account activity and cash flow. 

Purpose - To provide financing for businesses engaged in manufacturing, trading, or service activities for income generation. 

Target Group  - Existing current account customers, especially sole proprietors or individuals classified as MSMEs. 

Benefits - PABLs are often designed to be simpler and faster to access than traditional business loans, with some banks offering digital approval processes. 

Loan Amount - PABLs can range from ₹50,000 to ₹10 lakhs or more, depending on the bank and the customer's eligibility. 

Eligibility - Banks typically require customers to have an active, KYC-compliant current account with them for a certain period (e.g., 12 months) and may also assess loan eligibility based on the customer's credit history and cash flow. 

PABLs often come with no collateral security, offering simplified documentation and faster processing. 

The promoter's age should typically be a maximum of 70 years, and the loan is available for various businesses and trade activities. 

PABLs typically have simplified documentation formalities, making them a convenient option for businesses. 

Sekhar Pariti

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