Federal Bank, one of the leading scheduled commercial banks in India, provides business loan at attractive interest rates that start from 11.10% p.a. onwards. The bank majorly focuses on fulfilling the financial needs of Micro, Small, and Medium Enterprises (MSMEs). Let us explore the various business loan products offered by Federal Bank along with their features and repayment options.
Federal Bank Business Loan – Highlights – December 2022
|Loan Type/Category||Interest Rate (Fixed) p.a.|
|Loans to borrowers with an aggregate credit limit up to Rs. 25 lakh (Including contractors/ real estate developers)||11.10% to 14.25%|
|Loans to borrowers with an aggregate credit limit above Rs. 25 Lakh to 2 Crore (Including contractors/ real estate developers)||11.20% to 14.25%|
|Loans to borrowers with an aggregate credit limit above Rs. 2 Crore to Rs. 5 Crore (Including Contractors)||11.80% to 13.30%|
|Loans to Real Estate Developers above Rs. 2 Crore to Rs. 5 Crore||11.95% to 13.45%|
|Rent Securitization Loans||11.20% to 12.70%|
|Commercial Vehicle Loans||9.95% to 11.25%|
|Microcredit to SHGs/ JLGs/ Kudumbasree and similar schemes||12.50%|
|Loans under NRLM/ NULM||12.50%|
|Loan under PM SVANidhi scheme||16.00%|
Related Post: What is the interest rate on MSME Loan?
Repayment Tenure: Up to 120 months
Eligibility Criteria for Federal Bank Business Loan
The below-mentioned entities are eligible to apply for Federal Bank business loans:
- Self-employed professionals
- Private and Public Limited Companies, Sole Proprietorships, Partnership Firms, Limited Liability Partnerships (LLPs)
- Any other business entity engaged in Trading, Services, or Manufacturing sectors
Note: NBFCs and Companies dealing with Export Credit, Chit Fund, and Real estate are not eligible to apply for federal bank business loan
Also Know: What is the eligibility criteria for a Business Loan?
Corporate Finance Schemes offered by the Federal Bank
The Federal Bank also offers a variety of Corporate Finance to its customers that include the following:
- Term Loans
- Working Capital Loans
- Letter of Credit
- Bill Discounting
- Project Finance
- Bank Guarantee for Corporates
- Packing Credit Limit
- Pre-shipment Credit in Foreign Currency (PCFC)
- Rediscounting of Export Bills Abroad (EBRD)
Documents Required for Federal Bank Business Loan
- Duly filled application form with passport-sized photographs
- Identity Proof: Passport, Voters ID card, Driving License, PAN Card
- Address Proof: Utility Bills (Water/Electricity Bills), Passport, Ration Card, Trade License, Lease agreement
- Last 12 months’ bank account statement
- Business Address Proof along with PAN card
- Business Incorporation Certificate
- Last 2 years ITR, Sales tax returns with audited financials
- Any other document required by the Federal Bank
Features of Federal Bank Business Loan
Following are the key specifications of the Federal Bank Business loan:
- The bank provides different loan products for all individuals to SMEs and MNCs which suit the financial requirements of everyone.
- Interest rates ranging between 11.10% onwards per annum
- Flexible repayment options are available
- Minimal documents are needed in order to apply for a Business Loan.
Federal Bank – Repayment Options for Business Loan
Federal Bank offers flexible repayment options. The borrower can repay the loan in any of the following forms:
- FedNet – Internet Banking
- Mobile Banking
- National Automated Clearing House (NACH)
- Standing Instructions (SI) at the nearest bank branch
Toll-Free Numbers: 1800-420-1199
Q. How many business loan products are offered by Federal Bank?
Ans. Federal Bank offers multiple business loan products catering to all the business sections of the society.
- SME Parameterised Loan Scheme
- Business Loans for Professionals
- Federal Goldsmiths Loan scheme
- General Credit Card Scheme
- Loan to Mobile/ DTH/ Other electronic recharge vendors
- SME Loan against Property
Q. What is the mode of repayment in Business Loans?
Ans. One can repay the loan amount either through EMIs, Standing Instruction, Cheque, or ECS.
Q. What is the final interest rate on a business loan?
Ans. The interest rate is decided by the bank on the financial profile of the loan applicant. Credit Score plays an important role in finalizing the interest rate along with other credentials.
Q. For what purposes can a business loan be availed?
Ans. Business Loans can be availed for all business-related requirements like starting up a new venture, expanding the existing business, availing extra funds for operational requirements, starting new business-related projects, etc.
Read More: What is Pradhan Mantri Mudra Yojana Scheme?