||Rs. 1 lakh to Rs. 1 crore
||6 months to 5 years
||Up to 3% of loan amount
||Up to 7% of the outstanding amount + GST
Features of a Business Loan
Below-given are business loan details:
A Business Loan is a loan taken to fund business requirements such as working capital, expanding operations, adding equipments, inventory, sponsoring events, projects, hiring staff, wages, etc
At Loanbaba, you can compare top offers from banks/NBFCs for unsecured business loans. You can apply online for the schemes.
The lowest interest rate is 11% by Axis Bank, followed by 11.20% by State Bank of India.
The lowest EMI per Rs. 5 lakhs for 60 months tenure is 10,871
Types of Business Loans in India
There are several types of loans for business that are provided by banks and NBFCs today. Some of the popular types of business loans are mentioned below:
|Types of Loans for Business
|1. Unsecured Business Loan
||You can avail high loan amount up to Rs. 1 crore under this scheme. No security is to be kept with bank.
|This loan is for businesses that have at least 3 years vintage.
|The company has to meet the eligibility requirement set by the bank/NBFC in regards to annual turnover to qualify for the loan.
|2. Secured Business Loan
||In a secured loan, you have to provide an asset to the bank/NBFC providing you funds. The loan amount will be based on the monetary value of the asset.
|You can get up to 80% of the asset’s value as the loan amount.
|Many business owners take a loan against securities, loan against property, and other assets to arrange finances for their company.
|3. Working Capital Loan
||This type of loan is for the purpose of funding day-to-day operations of a company.
|The funds can be used to pay for regular business expenses to fuel the daily activities of the company.
|Business owners use a working capital loan for sales/marketing campaigns, wages, manufacturing, adding resources, etc.
|4. Equipment Financing
||This type of loan is taken to purchase equipment. Being a secured loan, the equipment itself serves as collateral.
|You can get up to 90% or 100% finance as per the value of the equipment.
|5. Line of Credit
||It is a revolving line of credit. Here, as a borrower you can take an agreed amount as credit.
|You can draw the amount whenever necessary. There is no necessity to withdraw the amount in lump-sum.
|Also, you have to pay an interest on the only amount used, instead of the total approved amount.
|6. Bill Discounting
||This scheme provides instant cash-back on bulk or large purchases by means of getting discount on credit sales
|You have to submit important documents which justify the transactions, such as transportation receipts, invoice, lading bills etc.
|7. Business Loan for Women
||There are special schemes for women who have exceptional entrepreneur skills.
|To be eligible for loan on business, the female must be an owner of at least 50 percent of the company.
|Such a loan can be provided at a discounted rate of interest.
|8. Mudra Yojana Business Loan
||The Mudra Yojana business loan was launched by the government of India for small and medium sized enterprises.
|These loans carry special interest rates and are provided by almost every bank offering business loans.
Business Loan Eligibility Criteria
Below given are the eligibility requirements:
|1. Who Can Apply?
||Self-employed individuals, professionals, service providers, manufacturers, private limited or limited company, etc.
|2. Applicant’s Age
||At least 21 years old
|3. Business Vintage
||Minimum 3 years
|4. Annual Turnover
||Over Rs. 50 lakhs
|5. Other Requirements
||Business should be registered, ITR of the last 3 years, and other required documents
Documents Required for a Business Loan
If you want to apply for an unsecured business loan, then you have to provide KYC (PAN Card, Aadhaar Card) - of Business /Directors/Partners/Proprietor. Apart from these, you have to submit the following documents.
||As a borrower, you must provide your recent passport-sized photographs
|2. Proof of Identity
||PAN card, Valid passport, Driving License, Aadhaar card, Voter's ID card
|3. Proof of Address
||Business address proof, Utility bill, Latest (not older than 3 months) water bill/electricity bill/telephone bill/gas connection, Voter's ID card, Passport, Aadhaar Card, Driving license
|4. Proof of Business Vintage and Ownership
||Proof of business existence for last 3 years, Shop Act/Gumasta License (if applicable), and registration proof
||GST Certificate and GST Returns of last 4 quarters
|6. Income Tax Return
||ITR for 3 years with computation
|7. Financial Documents
||Current/saving account bank statement for all current/saving accounts in PDF Format (latest 12 months)
|Audited Financials for 2 years - Balance Sheet and P&L
|Existing Loan Account statements/sanction letters.
Business Loan Interest Rates in India
The business loan interest rate starts at 12%. The rate of interest is influenced by the following factors:
Your age and personal profile
Your Credit score
Financial position of the company
Loan scheme chosen
Relationship with the bank/NBFC
NOTE: To better understand the factors that impact a loan’s interest rate - click
Business Loans Interest Rates by Top Banks
||Business Loan Interest Rates and Processing Fee (PF)
||Rs. 5 Lakhs Loan, Lowest EMI for 60 Months Tenure
|State Bank of India
||Rs. 5 lakhs to Rs. 100 crore
||11.20% - 16.30%, PF 2% to 3%
||Rs. 9,333 per month
||Rs. 50,000 to Rs. 50 lakhs
||15.70% onward, PF 0.99% to 2.50%
||Rs. 11,961 per month @15.75%
|NeoGrowth Credit SME Business Loan
||Rs. 1 lakh to Rs. 73 lakhs
||APR 21% onward, PF up to 3%
|Fullerton Business Loan
||Rs. 1 lakh to Rs. 50 lakhs
||17% onward, PF
||Rs. 12,426 per month
||Rs. 1 lakh to Rs. 40 lakhs
||12.90% - 16.65%, PF 0.99% to 2%
||Rs. 11,377 per month @13%
||Rs. 3 lakhs to Rs. 50 lakhs
||11% onward, PF up to 2%
||Rs. 10,871 per month
||Rs. 1 lakh to Rs. 10 lakhs
||16.25% onward, PF 1.80% to 2.20%
||Rs. 12,226 per month
||Rs. 3 lakhs to Rs. 75 lakhs
||17% onward, PF up to 2%
||Rs. 12,426 per month
||Rs. 1 lakh to Rs. 1 crore
||18% onward, PF up to 2%
||Rs. 12,697 per month
||Rs. 50,000 to Rs. 2 crore
||15% onward, PF 2%
||Rs. 11,895 per month
||Rs. 5 lakhs to Rs. 30 lakhs
||18% onward, PF 2%
||Rs. 12,697 per month
||Rs. 10 lakhs to Rs. 75 lakhs
||16.50% onward, PF 1.5% to 2%
||Rs. 12,292 per month
||Rs. 10 lakhs to Rs. 50 lakhs
||24.00%, PF up to 3%
||Rs. 14,384 per month
||Rs. 3.5 lakhs to Rs. 25 crore
||18% onward, PF up to 2.5%
||Rs. 12,697 per month
Business Loan EMI Calculator
EMI (equated monthly instalment) amount is a combination of both principal and interest component, which you have to pay every months towards repayment. You can use our FREE business loan EMI calculator before applying for a business loan India. With EMI calculator, you can get the following details:
You will get a detailed repayment table. The table shows a break-up of the Total Payment (Principal + Interest).
The calculation will also include the amortization schedule. This amortization or payment schedule will show the interest and principal amount to pay separately for a selected tenure.
You will also get details about the opening balance, EMI, break-up of the interest and principal, and the outstanding loan amount.
Illustration of a Business Loan
Here is an example on total cost of a business loan:
- Loan Amount: Rs. 1 lakh
- Interest Rate: 14%
- Processing Fee: Rs. 2,000
- Repayment Tenure: 60 months
- EMI: Rs. 2,327
- Total Interest Payout on Entire Tenure: Rs.39,610
- Total Payments (Principal + Interest + Processing Fee): Rs.139,610 + Rs. 2,000 = Rs. 141,610
Points to Consider Before Applying for Business Loan Online
Here are some of the factors to consider before you apply for an unsecured business loan:
|Things to Keep in Mind for Business Loan
|1. Compare Offers
||You must compare loan offers from different banks and NBFCs to pick a suitable deal.
|On Loanbaba you can compare interest rates, loan amount, tenure, fees, charges, EMI, and other details pertaining to a business loan deal.
|2. Interest Rate and Charges
||The rate of interest and charges affect the total cost of a loan
|Lower the rate of interest and charges, lower will be the total cost of the loan.
|3. Repayment Tenure
||Tenure, like the charges and rates, influence the total cost of the loan. A longer tenure means higher cost, as you have to pay interest for a longer time
|A shorter tenure entails lower loan cost. This is because you pay the interest for a shorter duration.
|Choose tenure as per your repayment capacity. If you can take a loan on a shorter tenure you can reduce the total interest payout.
|But if you want to select a longer tenure to make EMIs more affordable, do not hesitate to choose longer repayment duration.
|4. Credit History
||Banks and NBFCs offer best loan offer (lower rates, flexible tenure, highest loan amount possible, and other benefits) to those who are creditworthy. Creditworthiness of a company can be determine by its past repayment records.
|A clean repayment record means you had made regular payments on previous and existing loans. This will improve your chances of getting a loan approval. Since the loan will be for a business, your company’s credit history will be looked into.
|If your business is fairly new, then the lender will also check your personal credit history along with that of your firm. Thus, it is important to maintain a good personal credit score along with a good company credit score.
Why Choose Loanbaba to Help You Find a Business Loan Online
As a one-stop destination for your business funding needs, Loanbaba provides you a variety of business loan offers from top banks and NBFCs in India. Here is how you can ease your borrowing decision through our website.
- Check Eligibility and EMI: On our website, you can use the free-of-cost EMI and eligibility calculator to check your loan EMI and loan amount you are eligible to borrow.
- Grab Instant Quotes from Top Lenders: You will get instant quotes, interest rates, and offers from popular banks and NBFCs on our website.
- Quick e-Approval: You will receive instant approval of your business loan application if you have submitted the required documents and meet the fund-provider’s loan eligibility criteria.
- Best Customer Support Experience: We offer you a top-notch customer support. Our customer representatives will help you get the best loan deals at lowest rates. You can contact us at +91 8879695441/8805259089 or email on email@example.com.
- Guaranteed Privacy and Transparency: Your business loan application is sent to the bank/NBFC electronically. Thus, there is no risk to your privacy as information you share with us, is never shared with any unconcerned party.