Apply for Business Loan

Rs
Rs
+91
Personal Loan
4.6 / 5 (71 Reviews)

Business loan is a funding support offered by Banks and NBFCs to meet financial requirements of self-employed customers. It can be availed by individuals, MSMEs, etc. and is of two types secured and unsecured loans. Secured loans are type of loans that require  a collateral/security that a borrower needs to deposit with the lender to avail a loan. However, in case of unsecured loans, there is no need to submit any collateral/security with the bank.

Most of the financial institutions offer unsecured business loans, including term loan, working capital loan, loan under Govt. schemes, overdraft, etc. Leading banks also provide secured loans in the form of letter of credit, bill discounting, equipment finance, POS loans, etc.

The minimum loan amount offered starts from Rs. 30,000 and is usually offered by Non-Banking Financial Companies (NBFCs), Small Finance Banks (SFBs) or Micro Finance Institutions (MFIs), whereas applicants can avail collateral-free business loans for up to Rs. 1 crore. Small business loans are also available for MSMEs and startups.

Business loan interest rate starts from 14.99% onwards and is determined as per the eligibility of the applicant.

Bank/NBFC/Fintech

Interest Rate (p.a.)

Kotak Mahindra Bank 15% onwards
Axis Bank 15% onwards
HDFC Bank 16% onwards
ZipLoan 16% onwards
FlexiLoans 16% onwards
Fullerton Finance 17% onwards
Bajaj Finserv 17% onwards
ICICI Bank 18% onwards
Lendingkart Finance 18% onwards
Hero FinCorp 18% onwards
IIFL Finance 18% onwards
Tata Capital Finance 18% onwards
Indifi Finance 18% onwards
NeoGrowth Finance 18% onwards
RBL Bank 19% onwards
SMEcorner 20% onwards
IDFC First Bank 20% onwards
HDB Financial Services Ltd. 22% onwards

Note: The mentioned interest rates, fees and charges are subject to change and depend on the sole discretion of the bank, NBFC and RBI.

Credit Score is a 3-digit numeric that depicts the creditworthiness of an applicant, along with his/her financial history and repayment capability. Credit score is calculated by Credit Bureaus, as per the financial data provided to them by the banks and NBFCs. There are four leading credit bureaus in India that calculate and manage the credit scores of its customers, they are, TransUnion CIBIL, Experian, Equifax and High Mark.

In India, CIBIL score is mostly referred to by financial institutions before any loan or credit card approval. The CIBIL score ranges between 300-900 that is calculated on the basis of repayment history. Any score above 750 or as close to 900 is considered good by banks and NBFCs. Applicants with no credit history or low credit score should also build/maintain decent credit score in order to avail lending products.

Check the credit score for free and apply for loan online, as per the business requirements.

  • Age Criteria: Minimum 18 years & maximum 65 years.
  • An applicant with good credit score and no past loan defaults, if any
  • Minimum Annual Turnover of Rs. 10 lakh for existing enterprises

Eligible Entities

  • Individuals, Self-employed professionals, Startups and Micro, Small and Medium Enterprises (MSMEs)
  • Private and Public Limited Companies, Sole Proprietorship, Partnership Firms, Limited Liability Partnerships and Large Enterprises engaged only in Manufacturing, Trading or Services sectors
  • NGOs, Co-operative Societies, Trusts, CAs, Doctors, Architects, Company Secretaries, Designers, etc.

When applying for a business loan, you will need to submit the following documents:

  • Duly filled application form along with 2 passport-sized photographs
  • KYC Documents of the applicant, including PAN card, Passport, Aadhar Card, Driving License, Voter ID card, Utility Bills (Water/Electricity Bills)
  • Last 1 years’ bank statement
  • Annual Business Turnover: Minimum Rs. 10 lakh or above (for existing businesses or enterprises)
  • Non-Collateral Overdraft
  • Copy of Business Incorporation

The fees and charges of business loan vary from lender to lender and case to case. The fees and charges depends on the loan amount, interest rate and repayment tenure.

Apply for Business loan by following below mentioned steps:

Step 1: Fill in the required fields, such as desired loan amount, employment status, annual gross sales or turnover, city of residence, years in current business, collateral type and mobile number.

Step 2: Check the box to agree on terms and further Click to ''Unlock Best Offers''

Step 3: Further you will be required to mention the Company type, Nature of business, Type of industry, Gross Annual Profit, Bank Account, any existing EMI, Full name, Gender, Residence PIN code, PAN card, Date of Birth and Email Address.

Step 4: After submitting all the details, the bank's representative will contact you to proceed with loan formalities.

Step 5: Once your loan application is approved, within defined working days the approved loan amount shall get disbursed in your mentioned bank account.

To promote entrepreneurship among women, lenders have started offering attractive loan schemes to women entrepreneurs. These business financing schemes are exclusively for women and it provides them relief in terms of interest rates and collateral. Some of the banks also have special departments for women entrepreneurs where they provide them business consulting, training and counselling along with avenues for marketing and showcasing of their products. Women entrepreneurs whose ownership is less than 50% in the company are not eligible to avail the benefits of the women’s special schemes.

Some of the popular loan schemes for women entrepreneurs are as follows:

1. Term Loan

Term loan is offered under various types, such as short-term loan, long-term loan and other small business loans. The loan amount offered under term loan depends on the applicant’s profile and business requirements that can be repaid in 12 months to 5 years, in the form of EMIs. Term loans are divided into two parts, unsecured business loans and secured business loans. Secured loans require collateral to be submitted with the lender, which is not the case with unsecured business loans.

2. Working Capital Loan

Working capital loans are availed to meet the day-to-day business requirements or to manage business cash flow. The working capital loan can be availed for various other purposes, such as business expansion, buying equipment or machinery, purchasing raw material or goods, paying-off salaries or rent, enhancing inventory and much more.

3. Bill (Invoice) Discounting

Invoice discounting is a financial instrument offered by banks and NBFCs. Bill discounting is a source of working capital finance for the seller of goods on credit. It is a discount which a financial institution takes from a seller’s customer. Through the payment being made by letter of credit, the buyer has the option of buying goods from the seller. Bills that come under bill discounting are termed as ‘bills of exchange’.

4. Letter of Credit

Letter of credit is a payment instrument used mainly in international trade in which the bank provides monetary guarantee to enterprises which deal in import and export of goods. Enterprises doing businesses overseas have to deal with unknown suppliers and they require assurance of payment before performing any transaction. Therefore, a letter of credit is important to provide payment assurance to the suppliers or exporters.

5. Point of Sale (POS) Loan

Point of Sale Loan is a type of funding wherein merchants offer their customers some financial assistance at point of their purchase. Business owners, enterprises, MSMEs, entrepreneurs and retailers can avail Loan against POS machines to start a new business or to manage their existing businesses. POS Loan is also termed as Merchant Cash Advance in which the loan amount depends on business volume generated via POS terminals.

6. Overdraft Loan

An overdraft means overdrawing money from ones’ current/savings account even if the account balance is zero. An agreed rate of interest will be charged, if the overdrawn amount is within the limits of a preceding agreement. The interest rate is charged only on the utilized amount of the total withdrawal limit.

Ques. What is a good credit score to get instant business loans?

Ans. Any credit score that is above 750 is considered good by financial institutions.

Ques. How to choose the ideal repayment tenor for business loans?

Ans. Ideally, if you avail short-term loan then the repayment tenure should not exceed 12 months. However, it may increase as per the desired loan amount. The maximum repayment period can be chosen up to 5 years.

Ques. What is the impact of GST on business loans for new businesses?

Ans. GST plays an important role in getting business loans, as more the GST is paid, larger shall be the business volume. Therefore, it becomes easy for banks to rely on such applicants or borrowers that pay their GST.

Ques. What is the minimum turnover requirement for a loan to start a business?

Ans. The minimum annual turnover criteria is defined by the lender and varies from bank to bank. However, applicants shall apply online with minimum annual turnover of Rs. 10 lakh or above for existing enterprises or businesses.

Ques. Can an applicant who is 21 years avail business loan?

Ans. Yes, any individual who is 18 years and above at the time of loan application is eligible to apply for business loan.

Ques. Do I need to submit any collateral to the bank before applying for a business loan?

Ans. No, you are not required to submit any collateral to the bank or NBFC, only for few specific secured business loans, collateral is required.

Ques. What are the pre closure and part-prepayment charges in business loans?

Ans. The pre-closure and part-payment charges vary from lender to lender. It may be Nil from some banks and may exceed up to 4%-5% of the loan amount from others. Ensure to check the same with your lender.

Ques. What are the loan schemes initiated by the Government of India?

Ans. Some of the popular schemes include MUDRA Yojana under PMMY, SIDBI loanCGTMSEPMEGPStandup IndiaStartup Indiapsbloansin59minutes.comNSICNABARD, etc.

Bank of Baroda in partnership with U GRO Capital to disburse Rs. 1000 crore loan to MSMEs

26th July 2021: Under this co-lending program, Micro Small and Medium Enterprises (MSMEs) can now avail business loans worth of Rs. 1000 crore that shall be disbursed by Bank of Baroda in partnership with U GRO Capital. As per RBI’s revised co-lending regulation, 80% of the loan amount shall be disbursed by BOB and the rest by the NBFC partner. The loan can be availed by MSMEs operating at U GRO’s over 200 channels around 9 locations in cities that include Delhi, Mumbai, Kolkata, Chennai, Hyderabad, Jaipur, Ahmedabad, Pune and Bengaluru. Below are the loan details offered for MSMEs:

Features of MSME Loan under co-lending program

Interest Rate

8%-10% per annum

Loan Amount

Up to Rs. 50 lakh

Repayment Tenure

Up to 120 months

FM announces additional Emergency Credit Line Guarantee Scheme (ECLGS) for Covid-19 affected sectors

28 June 2021: Finance Minister Nirmala Sitharaman announces additional Rs 1.5 lakh crore funding under the Emergency Credit Line Guarantee Scheme (ECLGS) for Covid affected sectors. The sector-wise details shall be decided as per the requirements or sector needs. Now the ECLGS scheme is expanded up to Rs. 4.5 lakh crore. Approximately, 25 lakh people can avail the loan via Micro Finance Institutions (MFIs). This financial stimulus is launched as a part of Atma Nirbhar Bharat Package in May, 2020.

SBI Launches New Business Loan Scheme to support Healthcare Sector

June 25, 2021: SBI introduces Aarogyam Healthcare Business Loan scheme to offer financial support to the healthcare sector to fight Covid-19. Under this special loan category, healthcare entities can avail loans up to Rs. 100 crore, as per their geographical location. The repayment tenure of the loan is up to 10 years. Collateral-free loans up to Rs. 2 crore, as covered under guarantee of Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE). The nature of the loan is both Term Loan for expansion purposes, as well as Working Capital Loan in form of letter of credit and cash credit. For Tier I & Urban centres maximum loan amount offered is upto Rs 20 crore and Rs. 10 crore for Tier II to Tier VI centres.

Loans offered under Mudra Scheme exceeds Rs. 9 lakh crore

June 24, 2021: At G20 Labour and Employment Ministers’ Meeting, Labour Minister Santosh Kumar Gangwar announced that more than Rs 9 lakh crore has already been disbursed, as collateral-free loans under Mudra scheme. As per the labour minister, approximately 70% of the account holders are women under Pradhan Mantri Mudra Yojana (PMMY). Mudra Yojana was primarily introduced to offer financial support to budding entrepreneurs across the nation.

SME Loan Relief Measures during COVID-19

30th May 2021, SBI and IBA announce SME loan relief measures for individuals and MSMEs to lower the COVID impact. The Government of India declares an extension of its Rs. 3 lakh crore ECLGS - Emergency Credit Line Guarantee Scheme.

  • Public Sector Banks to offer restructuring loans to individuals, small businesses and MSMEs up to Rs 25 crore
  • For loans up to Rs. 2 crore, Govt. to provide 100% guarantee cover to hospitals, nursing homes, etc. for setting up of on-site oxygen generation plants
  • Interest Rate offered is 7.50%
  • The validity of ECLGS has also been extended to September 30, 2021
  • The disbursement under the scheme has been permitted up to December 31, 2021

RBI announces Rs. 50,000 crore funding support to fight COVID

5 May 2021: RBI Governor, Shaktikanta Das introduced new measures to tackle the second wave of COVID-19 in India. The Governor announced on-tap liquidity funding of Rs 50,000 crore, as a credit facility to be offered to banks, NBFCs and other lending institutions. This funding support is in the form of incentivised loan schemes that shall be offered to the enterprises engaged in healthcare, manufacturing and logistics sectors. Vaccine manufacturers, hospitals, medical equipment makers, as well as patients shall be offered loan schemes by the private and public sector banks, NBFCs, Micro Finance Institutions (MFIs) and Small Finance Banks (SFBs).

Government launches Atmanirbhar Bharat Abhiyan 2020

12 May 2020: Government launches Atmanirbhar Bharat Abhiyan 2020
Launched on 12 May, 2020 by Government of India, Atmanirbhar Bharat Abhiyan or Self-reliant India Scheme 2020 is a funding support scheme for the MSME sector to boost and promote growth and increase employment opportunities in rural and urban areas across India. Its main features include: 

  • MSME Loans worth of Rs. 3 lakh crore
  • Rs. 20,000 crore loan option for MSMEs
  • Repayment Tenure of 48 months with moratorium period offered is 12 months
  • 100% Credit Guarantee Scheme
  • Approx. 50 lakh shopkeepers to benefit, running pedestrian shops
  • Collateral Free Loans to MSMEs
  • For loans up to Rs. 3 lakh, releif of 2% in interest rate
  • Loans of amount Rs. 10,000 offered to pedestrian business owners
  • Manufacturing and Service MSMEs shall be considered as same entities

Self-reliant India is a scheme focusing on MSME sector and it does not mean cutting from rest of the world. New MSME definition was introduced as mentioned:

MSME – Merged Criteria: Investment and Annual Turnover

Sector/Enterprise Type

Micro Enterprise

Small Enterprise

Medium Enterprise

Manufacturing & Services Sector, Both

Investment less than Rs. 1 crore

Turnover less than Rs. 5 crore

Investment less than Rs. 10 crore

Turnover up to Rs. 50 crore

Investment less than Rs. 50 crore

Turnover up to Rs. 250 crore

Business Loan
4.6 / 5 (71 Reviews)

Business Loan

Paisabazaaroutstanding customer experience I would say
4/5

State Bank of India Business Loan

One thing is for sure that paisabazaar has quality and professional customer service executives. It was really a cakewalk for availing a business loan with you guys. From starting to find the best deal and till the final step it was overall great customer experience. Smooth loan process and exc..Read more...


Posted on: Apr 13, 2021
PaisabazaarAttractive interest rates on MSME loan
4/5

State Bank of India Business Loan

I am running a medium sized enterprise and for some business expansion purposes i required loan. At paisabazaar.com I checked for some loan deals that had attractive interest rates on MSME loan. Even better rates than business loans, so i picked one best deal with really low interest rates and ..Read more...


Posted on: Apr 13, 2021
PaisabazaarGot loan despite of having low cibil score
4/5

State Bank of India Business Loan

I was having low credit score but had to get a loan for my business. i clicked on paisabazaar.com to explore all the best options that can i get loan with low credit score.


Posted on: Apr 13, 2021
PaisabazaarQuick and easy business loan application I got
4/5

State Bank of India Business Loan

After applying loan from paisabazaar I got to know that there are only limited documents required for the loan and even the loan process is quick and easy that the loan gets approved in within couple of hours. Online form submission is also really simple and even uploading the documents. So alt..Read more...


Posted on: Apr 13, 2021
PaisabazaarGot Loan for My Business Requirements
4/5

State Bank of India Business Loan

I wanted to apply for short-term loan for my business requirements. The business required a loan amount up to Rs. 10 lakh and wanted to pay it in 12 months. But i was unaware of the loan deals offered by banks. Paisabazaar helped me in getting loan for my business requirements at low interest r..Read more...


Posted on: Apr 13, 2021
PaisabazaarNeeded collateral fee loan
5/5

State Bank of India Business Loan

I have plan to start a grocery store near my residence and for that i needed collateral free loan for my business. I was not aware that which bank shall offer me collateral free loans so i visited paisabazaar.com to check and compare from various loan deals. I picked one deal offered by SBI whi..Read more...


Posted on: Apr 13, 2021