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Business loan is a type of credit facility offered by Banks/NBFCs at an interest rate starting from 16.00% p.a. Financial institutions offer best business loans to their customers for business expansion purposes and to meet working capital requirements. Most of the Banks/NBFCs offers collateral-free business loans that can be repaid with a repayment tenure from 12 months to 5 years.
Financial institutions offer both secured and unsecured business loans to borrowers. Unsecured business loans are collateral-free loan offered for loan amount up to Rs. 1 crore, whereas secured loans are pledged by collateral/security. The loan amount offered for secured loan is above Rs. 1 crore and up to Rs. 50 crores, may exceed as per business requirements, stability, financial health and vintage.
Below mentioned are business loan interest rates offered by best Banks/NBFCs across India, along with its features, eligibility, purpose, types, and documents required.
Comparison of Business Loan Interest Rates offered by Best Banks/NBFCs
| Bank/NBFCs | Interest Rate |
| Axis Bank | 10.75% p.a. onwards |
| Flexiloans | 1% per month onwards |
| HDB Financial Services Ltd. | 8% - 26% p.a. |
| HDFC Bank | 10.75% - 25% p.a. |
| IDFC First Bank | 10.50% p.a. onwards |
| Indifi | 1.50% per month onwards |
| Kotak Mahindra Bank | 16% - 26% p.a. |
| Lendingkart | 12% - 27% p.a. |
| Mcapital | 2% per month onwards |
| NeoGrowth Finance | 15% - 40% p.a. |
| Tata Capital | 12% p.a. onwards |
| UGRO Capital | 9% - 36% p.a. |
| Bajaj Finserv | 10% to 26% |
Also Check: Which bank has lowest interest rate on business loan?
Features of Business Loan
- Nature of Loan: Term Loan, Working Capital Loan, Overdraft, Cash Credit
- Collateral-free loans (Unsecured Business Loans)
- Loan Amount: Up to Rs. 1 crore (Collateral-free)
- Repayment Tenure: Up to 5 years, shall exceed
Eligibility Criteria
- Age: Minimum 18 years at time of loan application and 65 years at time of loan maturity
- Credit Score: 750 or above
- Business Tenure: Minimum 1 year or above
- Minimum Annual Turnover: Rs. 12 lakh or above for existing enterprises
- Applicants with No previous loan defaults with any financial institution
Eligible Entities that can avail Business Loan
Individuals, MSMEs, Self-employed professionals, Startups, Sole Proprietorship, Private and Public Limited Companies, Partnerships, Limited Liability Partnerships, and Large Enterprises engaged only in the Manufacturing, Trading or Services sectors.
Business Loan EMI Calculator
EMI Calculator
₹
%
Year(s)
EMI Calculator
Monthly EMI ₹ 15,622
Total Amount Payble ₹ 5,62,395(Principal + interest)
Principal Amount ₹ 5,00,000
Total Interest Payble ₹ 62,395
Purpose of Business Loan
- To start a new business
- For business expansion purposes
- To meet working capital requirements
- To enhance business cash flow
- Buying raw materials
- Purchasing new or upgrading equipment and machinery
- Paying off rent and salaries
Types of Business Loans
- Term Loan (Short-term, Intermediate-term and Long-term Loan)
- Overdraft
- Cash Credit
- Working Capital Loan
- Letter of Credit
- Bill Discounting
- Equipment Finance or Machinery Loan
- Loans under Govt. schemes (Mudra, PMEGP, CGTMSE, SIDBI, NABARD, PMRY, CLCSS, PSBloansin59minutes.com, etc.)
- Point-of-Sale (POS) Loans
Documents Required
- KYC Documents: Applicant’s Passport, Voter’s ID card, Aadhar card, PAN card, Driving License, Utility Bills (Water & Electricity Bills)
- Income Proof: Last 1-year bank statement along with ITR
- Business address and vintage proofs
- Business PAN Card
- Company’s Incorporation Certificate
- Proof of belonging to SC/ST/OBC category, if applicable
- Any other document required by the lender