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Startup Business Loan

Startups need funds to build their businesses, but choosing the right credit option makes all the difference. Business loans are one of the most commonly used credit facilities to fund new businesses. To get the best loan offers, new businesses/startups can compare startup business loan offers on Paisabazaar and apply for the one that suits their business needs the best.
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HDFC Bank
Max Loan Amt.Upto ₹75L
Rate of Interest10.75% - 28%
Tenure uptoUpto 5 Years
Processing FeeUpto 2%
ICICI Bank
Max Loan Amt.Upto ₹50L
Rate of Interest13.25% 19.25%
Tenure uptoUpto 5 Years
Processing FeeUpto 2%
Axis Bank
Max Loan Amt.Upto ₹75L
Rate of Interest15% - 19.25%
Tenure uptoUpto 5 Years
Processing FeeUpto 2%
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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.

What are Startup Loans?

Startup Business Loans are offered to startups/new businesses by banks, NBFCs, etc., to fund, expand, or grow their business. The Government also provides financial assistance to startups through various schemes and initiatives across the country.

Startups can check, compare, and apply for startup business loans on Paisabazaar with interest rates starting from 13.00% p.a. The interest rates of these startup business loans vary from lender to lender based on the applicant’s profile.

Types of Startup Business Loans

Unsecured Startup Loans

  • Business loans offered to entrepreneurs to fund their business needs without the need for collateral.
  • Factors like your creditworthiness, financial history, business performance and more are considered by lenders before approving unsecured business loans

Term Loans

  • Long term business loans offered to startups for investment purposes
  • Can be used for business growth, acquisition or expansion of business units, etc.

Working Capital Loans

Working capital loans are used by businesses to manage their day-to-day operations, including paying for utilities, covering rent and salaries, etc.

Working Capital Loans include:

  • Cash Credit: A secured overdraft facility with a sanctioned limit; interest is charged only on the amount actually utilised.
  • Letter of Credit: A bank-backed payment guarantee for international trade, offering security to both buyers and sellers.
  • Bill / Invoice Discounting: Enables businesses to unlock immediate cash by discounting outstanding invoices, without waiting for customer payments.
  • Trade Credit: A short-term financing option for importers and exporters, helping bridge the gap between shipment and payment realisation.
  • Overdraft Facility: A flexible, short-term credit arrangement to manage sudden expenses or temporary cash flow mismatches.

Latest Business Loan Interest Rates by Banks and NBFCs

Lenders Interest Rate (% p.a.)
Axis Bank 15% - 19.25%
Bajaj Finserv 14.00% - 23.00%
Flexiloans 12.00% onwards
HDFC Bank 10.75% onwards
IDFC FIRST Bank 12.99% onwards
Indifi Capital 18.00% onwards
Kotak Mahindra Bank 9.50% - 30.50%
LendingKart 17.25% onwards
Muthoot Fincorp 15.00% - 36.00%
Shriram Finance 10.00% onwards
Tata Capital 12.00% onwards
YES Bank 15.99% onwards

Rates as on 10th Feb 2026

Eligibility Criteria for New Business/Startup Loans

  • The applicant should be between 21 years and a maximum of 65 years at the time of loan maturity
  • Should be self-employed
  • Should be a sole proprietorship/partnership firm/private or public limited company/a limited liability partnership (LLP)
  • Should have a credit score of 750 or above
  • Should not have any previous loan defaults with any bank
  • Total annual turnover of the firm should not exceed Rs. 25 crore

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Documents Required for Startup Business Loan

  • Duly filled application form with passport-sized photographs
  • KYC documents of applicant and co-applicants, including passport, Aadhar card, voter’s ID card, driving license, PAN Card and utility bills (telephone & electricity bills)
  • Last 12 months’ bank statement
  • Last 1-year ITR
  • Business Incorporation Certificate
  • Proof of business address
  • Any other document required by the lender

Government Loan Schemes for Startups in India

Find below the details of loan schemes initiated by the Government of India over the past few years:

Name of the Scheme Aim
Digital Communication Innovation Square (Valid till March, 2026) To catalyse startup culture and build a strong and inclusive ecosystem for innovation and entrepreneurship in India.
The Women Entrepreneurship Platform (WEP) To provide an ecosystem for budding & existing women entrepreneurs across the country. SIDBI has partnered with NITI Aayog to assist in this initiative.
Promoting Innovations in Individuals, Startups and MSMEs (PRISM) To provide grants, technical guidance, and mentoring to individual innovators by incubating their ideas towards the creation of new enterprises in phases.
Technology Incubation and Development of Entrepreneurs (TIDE) 2.0 To promote tech entrepreneurship through financial and technical support to incubators engaged in supporting ICT startups primarily engaged in using emerging technologies such as IoT, AI, Blockchain, Robotics, etc., in pre-identified areas of societal relevance.
Pradhan Mantri Mudra Yojana To provide loans up to Rs. 20 lakh to the non-corporate, non-farm small/micro enterprises. These loans are classified as MUDRA loans under PMMY.
SIDBI Make in India Soft Loan Fund for Micro Small and Medium Enterprises (SMILE) To offer loans with soft terms to meet the debt-equity ratio for the establishment of an MSME.
Swarojgar Credit Card To provide easy access to credit for small entrepreneurs and self-employed individuals in India.
PSB Loans in 59 minutes To provide digital loan approval in 59 minutes for  loans up to Rs. 5 crore
Credit Guarantee Scheme for Startups (CGSS) To provide a guarantee up to a specified limit against credit instruments extended by MIs to finance eligible startups.
Startup India Seed Fund Scheme To provide financial assistance to startups for proof of concept, prototype development, product trials, market entry, and commercialisation.

How to Apply for Business Loans for a Startup on Paisabazaar

Follow the steps mentioned below to apply for a business loan online on Paisabazaar:

Step 1: Visit Paisabazaar’s business loan page on the website or mobile app.

Step 2: Input your mobile number to verify with the OTP received.

Step 3: Input the required personal and business details, such as your name, age, address, business vintage, business type, annual turnover, etc.

Step 4: Compare the loan offers displayed from Banks/NBFCs as per your business requirements.

Step 5: Choose and apply after reviewing the terms, interest rates and related details.

Factors Influencing Business Loan Approval for Startups

Multiple factors influence the approval chances of your business loans. As a startup, keeping the below-mentioned factors in check can help you increase your chances and land better offers.

  1. Creditworthiness: The higher the credit score/rating of you and your business, the better the approval chances. Banks look at your credit profile to assess your repayment capacity and the risk involved.
  2. Business Stability: Cash flow stability, along with a low debt-to-income ratio, is considered safe by lenders.
  3. Business Type and Industry: The nature and industry of your business also influence the approval chances. The riskier the industry and the type of business, the more scrutiny the loan will face.
  4. Business Plan: A well-structured business plan that details goals, market research, and a clear roadmap for profitability significantly boosts approval chances.
  5. Loan Purpose: A well-specified loan purpose is preferred by lenders over unclear reasons.
  6. Documentation and Compliance: Accurate, up-to-date and error-free documentation helps prevent delays in loan approval. Additionally, for startups in India, DPIIT recognition can enhance credibility and access to specialised schemes.

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

HDFC BANKHDFC BANKAxis BankAxis BankICICI BankICICI BankIDFC First BankIDFC First BankKotak bankKotak bankTata CapitalTata Capital
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FAQs

No, collateral is not mandatory for an unsecured startup business loan. However, you may have to provide collateral for a secured startup business loan.

The loan amount varies depending on the credit profile, risk involved and more. To get an idea of the loan amount, applicants can contact preferred lenders.

The loan approval time varies across lenders. However, the general process involved in startup business loans is usually longer than other types of business loans. 

Yes, self-employed individuals can apply for a business loan, provided they meet the other eligibility criteria of the loan.

Yes, you can prepay your startup business loan. Always check with your lender before prepaying, as the prepayment terms might vary across lenders. 

Yes, startup loans may affect your credit score based on your repayment behaviour.

Yes, multiple schemes, including PMMY, CGTMSE, SMILE and more, are available for startups.

The best way to choose the right startup loan for you is to compare eligible business loan offers on Paisabazaar and apply for the one matching your requirement the best.  

A loan provided to a startup against a pledged property as security is known as a loan against property.

Stable cash flow suggests strong repayment capacity, financial discipline and business stability. This helps lenders develop confidence in you and approve your loan faster.

Yes, you can apply for a startup business loan online through Paisabazaar.

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