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Business Loan

A business loan provides quick access to funds for business owners including shopkeepers, entrepreneurs, local enterprises and MSMEs, to manageoperations or grow their business. Whether it’s working capital, equipment purchase, or expansion, these loans cover a wide range of financial needs. On Paisabazaar, you can compare curated offers of up to Rs. 1 crore from multiple banks and NBFCs and apply for the best business loan based on your eligibility....
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Business Loan EMI Calculator

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HDFC Bank
Max. Loan Amt.Upto ₹75L
Rate of Interest10.5% - 15%
Tenure uptoUpto 5 Years
Processing FeeUpto 2%
Axis Bank
Max. Loan Amt.Upto ₹75L
Rate of Interest11.5% - 19%
Tenure uptoUpto 5 Years
Processing FeeUpto 2%
Kotak Mahindra Bank
Max. Loan Amt.Upto ₹2Cr
Rate of Interest11.75% - 26%
Tenure uptoUpto 5 Years
Processing FeeUpto 2%

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Flexible Tenure of Up to 4 years

What is a Business Loan?

A business loan is a credit facility offered to self-employed individuals, professionals, private companies, partnership firms, MSMEs, etc. for financing their working capital requirements, capital expenditure requirements and other business-related activities. It can be secured or unsecured, depending on the lender’s requirements. With flexible terms, they help businesses manage cash flow and growth smoothly.

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At Paisabazaar, our aim is to make access to consumer credit easy, transparent and convenient for Bharat. For over a decade, we have been offering a wide choice along with seamless digital processes, to help consumers from varied segments access the best and most-suited lending solutions with ease. Backed by the trust of 50 million+ customers, Paisabazaar provides you with a superlative experience that is fast, secure and tailored to your needs.

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Rhishabh Garg

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How Can I Apply for a Business Loan Online?

Get up to ₹1 Crore in 5 Simple Steps

Step 1: Enter your mobile number in the application form.

Step 2: Enter OTP to verify your mobile number.

Step 3: Provide your personal details.

Step 4: Select a bank account for account aggregator consent.

Step 5: Compare offers and apply for the best-suited loan.

Business Loan Interest Rates

Interest rates on business loans may vary from lender to lender depending on the credit profile of the applicant, nature of the business, loan facility availed and the type of collateral/security pledged.

Interest Rates
HDFC Bank Business Loan Lendingkart Finance Business Loan
IDFC Bank Business Loan Axis Bank Business Loan
ICICI Bank Business Loan Kotak Mahindra Bank Business Loan
Flexiloans Business Loan SBI Bank Business Loan

Eligibility Criteria for Business Loan

Lenders usually set their business loan eligibility criteria based on the following factors:

  • Age: 21 years at the time of loan application and 65 years at the time of loan maturity (may vary across lenders)
  • Minimum Business Vintage: 3 years (can be 5 years for some lenders)
  • Minimum Business Turnover: Rs. 90,000 to more than Rs. 250 crore
  • Credit Score: 700 or above (some lenders may offer business loans to applicants having lower credit scores)
  • Minimum Income: Rs. 1 lakh p.a.
  • Eligible Entities: Sole Proprietorship, Partnerships, Limited Liability Partnerships, Private Limited Companies, Public Limited Companies, etc.

Documents Required for Business Loan

Applicants usually require the following documents to get their business loan applications processed.

Requirements Self-employed Professionals/Non-Professionals
Proof of Identity Passport, Voter ID, Driving License, Aadhaar Card or PAN Card
Proof of Residence Aadhaar Card, Voter ID, Passport or Utility Bills
Proof of Age Birth Certificate, PAN Card, Aadhaar Card, Passport, etc.
Proof of Income - Latest ITR along with income computation,
- B/S, P&L account statement for last 2 years certified by a CA
- Latest GST returns
- Bank statement for the last 6 months
Other Documents - A copy of company’s PAN
- Proof of ownership of residence or office
- Proof of business continuity
- Proof of business registration
- Certificate or declaration of sole proprietorship
- Deed copy of partnership
- Certified copy of MOA, AOA and Board Resolution
- Passport-sized photographs

Business Loan Fees and Charges

Borrowers of business loans have to pay processing fees, prepayment charges, commitment charges, inspection charges, account service charges, penal interest and documentation charges, etc. as and when required.

The fees and charges levied on business loans vary widely across lenders. Below-mentioned is an overall range of a few charges levied by lenders on business loans.

Particulars Charges
Processing Fees Up to 6% of the loan amount
Prepayment Charges Up to 5% of the outstanding principal
Penal Interest 2%-6% on the outstanding loan amount

Types of Business Loan

Lenders offer various business loan schemes to suit the varying operational and sector/industry-specific requirements of businesses. Hence, before making a choice, prospective borrowers should understand these schemes, their cost, repayment structures, etc. and how they align with the financial and operational requirements of their businesses.

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Unsecured Term Loans

MSMEs can avail collateral-free loans to meet their business needs, such as expansion of operations, technology upgradation and meeting the cash flow requirements.

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Secured Term Loans

These loans are offered against collateral like immovable property, existing business assets, financial instruments, etc.

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Unsecured Overdraft Business Loan

An unsecured credit line wherein applicants can make withdrawals within a predetermined limit.

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Secured Overdraft Business Loan

Existing customers can avail this credit line to finance their business operations and cash flows by mortgaging their properties, financial instruments, etc.

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Professional Loan

These loans are offered to self-employed professionals to finance their various profession-related requirements.

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Bill Discounting

This credit facility allows businesses to raise finance by selling their invoices/receivables before their due dates to the lenders at a discount.

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Machinery Finance

This credit facility allows businesses to finance their machinery/equipment purchases.

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Purchase Financing

Lenders offer this loan to manufacturers, traders and service providers to pay for the raw materials and trading goods purchased from the suppliers.

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Letter of Credit

This is a payment guarantee issued by the lender that enables the businesses operating in international trade to minimize their credit risk.

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How to Calculate EMI for a Business Loan?

Business loans availed in the form of term loans are repaid through EMIs. Thus, those planning to avail business loans can calculate EMIs using the formula as below:

EMI = [P x R x (1+R)^N]/[(1+R)^N-1],

where,

‘R’ denotes the rate of interest

‘P’ denotes the principal amount

‘N’ denotes the loan tenure

As manual calculations can be tedious and susceptible to errors, using an online business loan EMI calculator can be a faster and more reliable option for consumers.

This calculator requires only a few key details, such as the interest rate, loan amount and tenure, to compute the EMI.

Once you input these details, the calculator instantly provides the EMI, total interest payable and amortization schedule, allowing you to compare different business loan options based on your repayment capacity.

Personal Loan vs Business Loan – Which One Best Suits Your Needs?

  • Personal loans can be used for meeting both personal and business requirements whereas business loans can be used only for financing various business-related activities.
  • While personal loans are usually unsecured in nature, business loans can be both secured and unsecured in nature.
  • Personal loans are offered as term loans, where repayment is EMI-based, or as an overdraft facility but business loans are offered in the form of term loan facility, limit-based facilities like overdraft and cash credit accounts, bill discounting, non-fund based facilities like letter of credit and bank guarantee, etc.
  • Loan applicants planning to avail lesser loan amounts without collateral can apply for personal loans or unsecured business loans.
  • Borrowers having more complex requirements and/or greater repayment flexibility should opt for respective business loan schemes based on their requirements.

5 Things To Know Before Applying For a Business Loan

It is important for applicants to understand the following points before applying for a business loan:

Interest Rate:

  • Business Loan interest rates vary across the lenders.
  • Applicants should check the interest rates offered by various lenders.
  • Opt for an offer with the lowest interest rates to incur lower cost of credit.

Turnaround Time:

  • Applicants should know the time taken by the bank or NBFC for the approval and disbursal of a business loan.
  • Lenders disbursing the business loans in lesser time are usually preferred by the borrowers.
  • The turnaround time would depend on the type of business loan scheme and the type of collateral pledged for.

Credit Score/Rating:

  • Applicants with a credit score of 700 and above usually have higher chances of approval.
  • Some lenders also offer business loans at lower interest rates to those having high credit score/rating.
  • Low score can lead to rejection or higher cost of credit.

Processing Charges:

  • Processing fee and other charges may vary based on the applicant’s profile.
  • Try to negotiate the best offer with the lowest processing fee and fine/penalty in future.

Collateral:

  • Lenders usually offer business loans against collateral/security.
  • Collateral can be hypothecation of stocks, book debts, mutual funds, immovable property, liquid security, commercial or construction equipment.
  • If credit score is not high, you can opt for a collateral-backed business loan instead of an unsecured one.

Also Read: Closing the Credit Gap: Six Factors Crucial to Empowering India's MSMEs

How Can I Apply for a Business Loan Online?

Get up to ₹1 Crore in 5 Simple Steps

Step 1: Enter your mobile number in the application form.

Step 2: Enter OTP to verify your mobile number.

Step 3: Provide your personal details.

Step 4: Select a bank account for account aggregator consent.

Step 5: Compare offers and apply for the best-suited loan.

Explore Our Business Loan Lenders

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What our customers say

No Guarantor Needed

I got loan for opening my clothing store from Paisabazaaar without any difficulty. they did ask for any guarantor or third party. Recommended!

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VinodDec 29, 2020

Well Guided

I was guided with well-manner..Thanks a lot. i can open my own boutique. Thanks again to Paisabazaar.

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KajalDec 29, 2020

No collateral or security demanded

Really Professional...nice experience with paisabazaar.com in getting short-term loan with Axis Bank. No collateral was asked by the bank and it was instant.

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SurbhiDec 29, 2020

customer service was very supportive

A big thanks to the customer team of paisabazaar.com, i am from Delhi but always planned to open a resort in Goa. I had finances but not as much that was required. Got it going with Axis bank and their professional staff.

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JayDec 29, 2020

Easy Documentation

Just Amazing !! Thanks a lot paisabazaar for helping me to start my coaching institute. The loan amount was not huge but managed it to get with Axis Bank with few documents and at low interest rates with more benefits.

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ZakirDec 29, 2020

great customer experience

I was aware of paisabazaar but have never tried to take any loan. My friend had taken, so he suggested to get loan to start your water dealership from paisabazaar. It was nice experience.

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HarshitDec 29, 2020

I got quick loan

Nice...u guys have proved it again to be the best. Getting me loan from one of the renowned banks was really great.

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ShankarDec 29, 2020

Very much satisfied with the business loan services

Getting loan with low credti score was my problem. But thanks to the team of paisabazaar in getting me loan from Citibank.

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VijayDec 29, 2020

Easy Process & Great Services

Thanks !!! U mean a lot to me now..yes its Paisabazaar that has helped me throughout in getting loan to start my own singing studio.

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TanviDec 29, 2020

No collateral demand

Wow experience. It was just so simple and hassle-free to get a collateral-free loan from Citibank at really effective cost for me to pay. Thanks.

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PriyankarDec 29, 2020
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