|Loan Amount||Rs. 1 lakh to Rs. 1 crore|
|Interest Rate||11% onward|
|Tenure||6 months to 5 years|
|Processing Fee||Up to 3% of loan amount|
|Foreclosure Fee||Up to 7% of the outstanding amount + GST|
Below-given are business loan details:
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||Details|
|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.|
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|
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.
|1. Photograph||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|
|5. GST||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.|
The business loan interest rate starts at 12%. The rate of interest is influenced by the following factors:
NOTE: To better understand the factors that impact a loan’s interest rate - click
|Bank||Loan Amount||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|
|HDFC Bank||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|
|ICICI Bank||Rs. 1 lakh to Rs. 40 lakhs||12.90% - 16.65%, PF 0.99% to 2%||Rs. 11,377 per month @13%|
|Axis Bank||Rs. 3 lakhs to Rs. 50 lakhs||11% onward, PF up to 2%||Rs. 10,871 per month|
|RBL Bank||Rs. 1 lakh to Rs. 10 lakhs||16.25% onward, PF 1.80% to 2.20%||Rs. 12,226 per month|
|Kotak Bank||Rs. 3 lakhs to Rs. 75 lakhs||17% onward, PF up to 2%||Rs. 12,426 per month|
|Capital Float||Rs. 1 lakh to Rs. 1 crore||18% onward, PF up to 2%||Rs. 12,697 per month|
|Lendingkart||Rs. 50,000 to Rs. 2 crore||15% onward, PF 2%||Rs. 11,895 per month|
|Standard Chartered||Rs. 10 lakhs to Rs. 75 lakhs||16.50% onward, PF 1.5% to 2%||Rs. 12,292 per month|
|Deutsche Bank||Rs. 10 lakhs to Rs. 50 lakhs||24.00%, PF up to 3%||Rs. 14,384 per month|
|Edelweiss||Rs. 3.5 lakhs to Rs. 25 crore||18% onward, PF up to 2.5%||Rs. 12,697 per month|
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:
Here is an example on total cost of a business loan:
Here are some of the factors to consider before you apply for an unsecured business loan:
|Things to Keep in Mind for Business Loan||Details|
|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.|
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.
Below-given are business loan FAQs:
Follow the below mentioned steps to get your business loan application processed faster:
Those who can apply for a business include: self-employed individuals such as architects, doctors, CAs, or self-employed non professionals such as partnership firms, sole proprietors, public limited companies, and private limited companies involved in the business of manufacturing, trading, and services.
Banks and NBFCs offer loans to those between 21 years and 65 years of age.
The time taken for loan amount disbursal varies from one financial institution to other. If you submit correct documents, the loan can be processed faster. Usually it takes 3 to 4 days to process the loan.
The tenure is between 1 year and 5 years, but may vary as per the discretion of the financial institution.
For a financial institution to take a lending decision, it is important that your business has enough vintage and a growth figure. It gives the lender an assurance of your company’s stability, authenticity, and profit over years. These factors together decide your repayment capacity. Banks typically need at least 3 years of business stability and profitability. The lender may specify the minimal annual growth rate or turnover in their eligibility criteria.
Lenders check financial stability to understand your repayment ability. For this purpose, the lending institution will check your company’s (and in some cases, your personal account) bank statement of the recent 6 months or a year. The bank/NBFC will consider your average account balance, outbound and inbound cheque bounce information, credit track record, etc to determine your loan eligibility.
The bank/NBFC will prefer that you submit audited financial reports and statements. This is because such reports are authentic and have lower chances of errors or discrepancies. It will reduce the bank’s work on spending time on verifying these documents. Also, it will increase your ability to get the funds as audited reports are more accurate, which is needed to give a real idea to the lender about your financial information.
Pre-closure fee is charged if you wish to close the loan before the end of tenure. Financial institutions may impose this fee to cover the loss. The fee can be up to 3% (sometimes more) of the outstanding amount.
If you take a loan on a fixed rate, then the interest rate will not change throughout the tenure. But if you take a loan on a floating rate, the interest rate pay change time and again, and so will the EMI amount. Most of the business loans carry fixed interest rates. However, in certain cases, a floating rate may be applicable. Check details of the loan scheme to understand the type of interest rate applicable.
The below 3 factors influence the rate of interest:
You can lower the loan EMI if you opt for full or partial prepayment. Most financial institutions may allow foreclosure or par pre-payment after the complete payment of the initial 6 to 12 EMIs. So you can choose to repay the loan sooner and save yourself on the interest payout. Partial payments can also help to lower the EMI burden for the rest of tenure.
Co-applicants are equally responsible as the primary applicant, to shoulder the responsibility of the loan. So if the primary borrower fails to repay the loan on time, it will affect the co-applicants. In case of a default, all the applicants are liable. Thus, credit scores of every applicant will be negatively affected.
Very safe reliable and convenient process. Pooja madam and her team assisted very professionally and completed the loan process. Thanks team and loan baba. BR Sahana Ragavendra
Thank you for your support. I never seen this type of good service. You are (Loanbaba) the best in the industry . I have taken short term loan from other NBFC and they are rude. Great experience and great help Thank you...
Rajendra prasad Gangapatla
It has been great. Hope I will avail the facility I have applied for.