Business Loans are the perfect financial instrument to meet the urgent and day-to-day business requirements of individuals, startups, and self-employed professionals, as well as MSMEs, business owners or entrepreneurs. As per today’s market trend, Banks and NBFCs offer minimum interest rate for Business or MSME loans from 16% p.a. onwards. These interest rates may vary depending on your annual revenue, creditworthiness, repayment history, CIBIL score, business vintage, financial stability, etc. Business loans for women entrepreneurs are offered at discounted or concessional rates by most lenders.
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Loan Amount & Eligibility Criteria
Financial institutions offer collateral-free business loans of loan amount up to Rs. 2 crores. There are several Banks/NBFCs that offer credit for small and large businesses, and even business loan to start-ups. Below mentioned is the basic list of eligibility to apply for a business loan in India.
- Age Limit: Applicant must be at least 18 years and maximum of 65 years
- Applicant’s creditworthiness with good repayment history
- Good CIBIL score (Above 700)
- Applicant with no previous defaults with any lender
Calculate your Monthly EMI on – Business Loan EMI Calculator
Business Loan for Self-employed (Professionals & Non-professionals)
There are various sorts of business credit customers, some are self-employed or paid, and others are companies and industries. According to a business bank’s request, a large bank will have two types of customers. The criterion, the applicant’s judgment style, scalability, interest rate, and the tenure vary according to each customer category. So when applying for a loan, check the customer type you have and look for eligibility criteria.
- Self Employed Professionals (SEP) are usually Chartered Accountants, Allopathic Doctors, Company Secretaries, Architects, and Designers
- Self Employed Non-professionals (SENP) as other types of traders and manufacturers. Depending on the loan category, tenure changes as per the eligibility criteria, document requirements, and interest rates
Comparison of Business Loan Interest Rates offered by Top Banks/NBFCs
| Bank/NBFCs | Interest Rate | |
| Axis Bank | 10.75% p.a. onwards | Apply Now |
| Flexiloans | 1% per month onwards | Apply Now |
| HDB Financial Services Ltd. | 8% - 26% p.a. | Apply Now |
| HDFC Bank | 10.75% - 25% p.a. | Apply Now |
| IDFC First Bank | 10.50% p.a. onwards | Apply Now |
| Indifi | 1.50% per month onwards | Apply Now |
| Kotak Mahindra Bank | 16% - 26% p.a. | Apply Now |
| Lendingkart | 12% - 27% p.a. | Apply Now |
| Mcapital | 2% per month onwards | Apply Now |
| NeoGrowth Finance | 15% - 40% p.a. | Apply Now |
| Tata Capital | 12% p.a. onwards | Apply Now |
| UGRO Capital | 9% - 36% p.a. | Apply Now |
Note: Business loan interest rates are updated as on 2022.
Repayment Tenure
The repayment tenure offered by the financial institution ranges from 12 months to 5 years, it may exceed depending upon business requirements and as per the bank’s sole discretion. When the tenure is less, EMI tends to be on the higher side, which means you can close the debt and pay less for the amount, and you save on paying interest. If you are comfortable with large EMIs, it is better to take this step to pay the minimum interest rate.
Also Read: Business Loan Interest Rates All Banks 2021
Documents Required
- Duly filled application form with passport-sized photographs
- Self-written Business Plan
- KYC Documents of Applicant: Passport, Voter’s ID card, Aadhar card, PAN card, Driving License, Utility Bills (Water & Electricity Bills)
- Business PAN Card
- Business address and vintage proof
- Last 1 year ITR and bank statement
- Company incorporation or establishment certificate
- Proof of belonging to SC/ST/OBC category, if applicable
- Any other document required by the lender
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Customized Credit Services Available
For some banks and financial institutions, with a simple three-step process, it is quick and convenient to apply for this loan. The applicant must fill out the online application form on the company’s website. Once the information qualifications are satisfied, bank employees will communicate with the applicant within 24 hours regarding a representative, loan issuance, and documentation. Finally, the applicant should submit the required documents. After the document verification, the loan is disbursed post the processing fee payment.
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