Business Loan

• Loan amount: Up to Rs. 1 crore
• Tenure: Usually up to 5 years; some lenders may offer up to 7 years
• Interest rate: Starting from 13% p.a. (as on 15th May 2026)
• Processing fee: Up to 3% of the loan amount
• Collateral: No need for collateral
• CIBIL Score Required: 760+ (preferably)
• Types: Unsecured, secured, term loans, working capital loans, startup loans, etc.

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.

Unsecured Term Loans

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

Working Capital Loans

Working capital loans are availed to meet a company’s everyday financial requirements, such as payroll, rent, daily operations, seasonal financial needs, etc.

Secured Term Loans

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

Unsecured Overdraft Business Loan

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

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.

Business loan offers vary depending on specific financial needs as per the business type, size, industry, sector, etc. Applicants can choose the most suitable loan option depending on their industry-specific requirements and the category they fall into.

Business Loans for Startups

Business Loans for Women Entrepreneurs: Special rates/schemes.

Loans for Manufacturers

Loans for Traders/Retailers

Loans for Doctors & Professionals

Business loan interest rate starts from 13% p.a. at Paisabazaar. Multiple factors influence the business loan interest rate, including, credit profile of the borrower, income, business stability, existing debt obligations, and more. Keeping these in checks can help borrowers attract lower interest rates.

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

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

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.

For a smooth and seamless experience, applicants should follow best practices and take into account the following:

Interest Rate Type

Business loans are usually offered at fixed interest rates. However, a few lenders may offer business loans at floating interest rates as well. If given a choice, select the interest type based on your cash-flow stability, risk appetite, and long-term business plans, as this will directly impact repayment predictability and overall cost.

Lender Type Differences

Public sector banks, private banks, NBFCs, and fintechs have different approval timelines, risk appetites, benefits and limitations. Select your lender carefully to maximize your benefits.

Credit Score/Rating

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

Processing Charges

Processing fees and other charges may vary based on the applicant’s profile. Try to negotiate the best offer with the lowest processing fee.

Prepayment Rules

Most lenders levy rules on prepayment or foreclosure, including lock-in periods, charges on prepayment and more. Being aware of these terms helps you plan your loan journey better.

EMI Affordability

Before you take a loan, it is pertinent to understand your EMI affordability to avoid missed EMI payments. Use a business loan EMI calculator to try various combinations of loan amount, tenure and interest rate and choose the one with the most comfortable EMIs. 

Loan Tenure Selection

The longer the tenure, the smaller the EMIs but the higher the total interest cost. The shorter the tenure, the higher the EMIs but the lower the total interest outgo. Choose a tenure as per your future business plan and EMI affordability to ensure smooth repayments.

Small businesses can avail business loans under various government schemes to start or expand their businesses and provide employment to others. Some of the most important government loan schemes are discussed below:

PMMY (Pradhan Mantri Mudra Yojana)

The government enables non-corporate, non-farming, small and micro enterprises to avail business loans under the Pradhan Mantri Mudra Yojana (PMMY) through designated banks, NBFCs, MFIs and other financial institutions that can help these entities grow their businesses.

Enterprises can avail loans under PMMY in four designated categories:

PSB Loans in 59 Minutes

CGTMSE Scheme (Credit Guarantee Fund Trust for Micro and Small Enterprises)

SMILE (SIDBI Make in India Soft Loan Fund for MSMEs)

PMEGP (Prime Minister’s Employment Generation Programme)

Stand-Up India

Vijay Pal Sharma - For Expanding Medical Store Business

I run Vijay Pal Pharmacy in Gurgaon. I got an opportunity to open one more medical store in the main market but did not have enough money for it. I applied for the business loan by visiting the Paisabazaar seva kendra and my loan was approved. I was surprised that the loan amount was credited in just a week’s time.

Sourabh Jain - For Bus Business

I run bus service from Jaipur to nearby cities and when I needed a loan to set up offices in Ahmedabad, Udaipur and Kota, I applied for the loan through Paisabazaar app. The credit person guided me in applying for the business loan, submitting the required documents and getting the loan approval directly from my office. I think the way they helped me collect all documents beforehand and submit them as required made the approval very smooth.

Devanshu Kohli - Loan for My RC Drone Startup

My startup for low-cost RC Drones needed funds but we weren’t getting funding from anyone as it’s a new venture. However, when I connected with Paisabazaar, they helped me secure a loan worth 40 lakh. Initially it was difficult convincing any lender but the support from Paisabazaar guys helped a lot. If you genuinely need funds for your startup, do give a try with Paisabazaar.