Securing sufficient financing is a pivotal step when starting or expanding a business. In India, entrepreneurs and business owners often rely on business loans to fuel their growth and initiate new ventures. Numerous banks, non-banking financial companies (NBFCs), and other financial institutions in India provide business loans at competitive interest rates. These loans cater to various business needs, including working capital requirements, expansion plans, purchasing equipment, or funding new business ideas. However, selecting the ideal business loan in India can be daunting due to the plethora of lenders and loan options available. To simplify your decision-making process, we present a list of the top business loans in India, complete with details on their features, eligibility criteria, interest rates, and other essential factors to help you make the best choice for your company.
1. State Bank of India (SBI) Business Loans
Overview:
State Bank of India (SBI) offers a variety of business loans tailored to meet the diverse needs of entrepreneurs and businesses across various sectors. These loans cater to a wide range of business requirements, including working capital, equipment purchase, business expansion, and new projects.
Key Features:
Loan Amount: SBI provides business loans ranging from ₹50,000 to ₹20 crore, depending on the financial needs and history of the company.
Interest Rate: The interest rates vary between 10% to 21%, attracting many businesses.
Flexible Repayment Options: Repayment tenures range from 1 to 5 years, allowing businesses to choose based on their financial capabilities.
Minimal Documentation: Simplified documentation process for quicker and easier loan approvals.
Eligibility Criteria: Available to various entities such as sole proprietorships, partnerships, limited companies, and more.
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2. HDFC Bank Business Loan
Overview:
HDFC Bank offers both personal and business loans, meeting the financial needs of all Indians. They provide various loan options for specific business needs like working capital, term loans, and equipment purchase.
Key Features:
Loan Amount: Business loans up to ₹50 lakhs, with selected locations offering up to ₹75 lakhs. No collateral or guarantee required.
Flexible Tenure: Repayment tenure ranges from 12 to 48 months.
Eligibility Criteria: Minimum turnover of ₹40 lakh, 3 years of operation, 2 years of profitability, and a minimum annual income of ₹1.5 lakh. Business owner must be between 21 to 65 years old.
Easy Apply: Online application process with bank coordination after form submission.
Convenient Borrowing: Includes credit protection and quick eligibility checks.
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3. ICICI Bank Business Loan
Overview:
ICICI Bank provides business loans to self-employed individuals, professionals, new businesses, and businesses without audited financials.
Key Features:
Loan Amount & Tenure: Loans up to ₹2 crore with a repayment tenure of up to 7 years.
Eligibility Criteria: Specific age, turnover, and profit requirements, along with proof of business stability.
Interest Rate: Varies from 12.90% to 16.50%, determined by loan amount, CIBIL score, and tenure.
Required Documents: Includes PAN card, identity proof, address proof, business plan, bank statements, and ITR files.
Additional Benefits: Overdraft facility and no requirement for guarantor or security.
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4. Axis Bank Business Loan
Overview:
Axis Bank offers business loans with minimal documentation and attractive interest rates, catering to individuals, partnerships, sole proprietorships, LLPs, private limited companies, trusts, and societies.
Key Features:
Loan Amount: ₹3 lakh to ₹50 lakh for small businesses.
Tenure: 12 to 36 months, depending on the CIBIL score and loan amount.
Interest Rate: Floating rate of 11.05% to 17.75% and fixed rate of 14.25% to 20% per annum, with processing and part payment charges.
Age Requirement: 21 to 65 years.
Document Requirements: Proof of ₹2.5 lakh income (as per ITR for the last 2 years) for individual loans and ₹3 lakh cash profit (as per ITR for the last 3 years) for non-individual loans.
Easy Apply: Online eligibility check and application submission.
5. Bajaj Finserv Business Loan
Overview:
Bajaj Finserv offers various loan products to individuals and companies, with minimal documentation and flexible repayment tenure.
Key Features:
Loan Variants: Term, Flexi Term, and Flexi Hybrid loans.
Loan Amount: Up to ₹80 lakh, depending on turnover, credit score, etc.
Repayment Tenure: 1 year to 8 years.
Interest Rate: 9.75% to 39% per annum, with processing fees up to 3.54% of the loan amount.
Eligibility Criteria: Indian citizen with 3 years of business history, 685 or above CIBIL score, and aged 24 to 80 years.
No Collateral Required: No need for property, gold, or other security.
Required Documents: KYC documents, PAN card, business proof, and other financial documents.
6. Tata Capital Business Loan
Overview:
Tata Capital offers competitive business loans to support small and medium-sized companies with flexible features and competitive interest rates.
Key Features:
Loan Amount: Up to ₹90 lakh without collateral or security.
Repayment Tenure: 12 to 60 months, with fixed EMI plans.
Interest Rate: 12% per annum for professional loans and 15% per annum for non-professional loans.
Required Documents: KYC documents, business proof, income proof, six-month bank statement, 650 or more CIBIL score, 3 years of profitability, and 2 years of business stability.
Easy Apply: Online application process.
Age Requirement: 21 to 60 years.
7. Kotak Mahindra Bank Business Loan
Overview:
Kotak Mahindra Bank provides business loans to small, medium, and large companies, offering financial assistance to various business entities.
Key Features:
Age Requirement: 25 to 65 years old.
Loan Amount: ₹3 lakh to ₹75 lakh.
Repayment Tenure: Up to 48 months with easy EMI.
Interest Rate: Starts at 16% per annum, with processing fees up to 2% of the loan amount and foreclosure charges of 5-6%.
Required Documents: Identity proof, address proof, ownership proof, business proof, firm constitution documents like GST registration, 3 years of business history, minimum ₹40 lakh turnover, and 1 year of profit.
8. IDFC First Bank Business Loan
Overview:
IDFC First Bank offers business loans designed to meet various financial needs, with competitive interest rates and a simple documentation process.
Key Features:
Loan Amount: ₹1 lakh to ₹75 lakh.
Interest Rate: Starting from 14%.
Flexible Tenure: 12 to 84 months.
Minimal Documentation: Ensures quick loan disbursal.
Eligibility Criteria: Includes business vintage, turnover, profitability, credit score, and more, depending on the specific loan product.
9. Punjab National Bank (PNB) Business Loan
Overview:
Punjab National Bank (PNB) offers a wide range of business loans at MSME loan interest rates, catering to the financial needs of business proprietors.
Key Features:
Loan Amount: ₹50,000 to ₹10 crore.
Interest Rate: Competitive rates based on loan amount, occupation, tenure, and credit history.
Flexible Repayment Options: Allows borrowers to choose a suitable repayment tenure.
Minimal Documentation: Streamlined documentation process for hassle-free loan applications.
Eligibility Criteria: Includes business vintage, turnover, credit score, and more, depending on the specific loan product.
10. IndusInd Bank Business Loan
Overview:
IndusInd Bank offers unsecured business loans with fixed interest rates, supporting various business needs such as expansion and working capital.
Key Features:
Loan Amount: ₹1 lakh to ₹50 lakh.
Interest Rate: 13% to 22%, based on loan amount, tenure, and borrower’s credit profile.
Flexible Tenure: 12 to 60 months.
Easy Application Process: Online or branch application options.
Eligibility Criteria: Includes business vintage, turnover, profitability, credit score, and more, depending on the specific loan product.
FAQ (Frequently Asked Questions) About Business Loans
Q1. Which type of loan is best for businesses in India?
Ans. Term loans are considered the best for businesses in India. These loans can be either secured or unsecured, with fixed tenures ranging from 1 to 5 years.
Q2. Which Indian bank is best for business loans?
Ans. HDFC Bank, Axis Bank, and ICICI Bank are among the top choices for business loans in India. They offer competitive interest rates, substantial loan amounts without requiring collateral, and have a streamlined application process.
Q3. Which loan is best to start a business?
Ans. A Working Capital Loan is ideal for starting a business. HDFC Bank, Axis Bank, and ICICI Bank are good options to consider for such loans.
Q4. Can I get a 50 lakh loan for business?
Ans. Yes, obtaining a 50 lakh loan for business is possible. Banks like SBI, HDFC Bank, and ICICI Bank provide such substantial business loans.
Q5. Which loan is cheaper?
Ans. Secured loans are generally more affordable as they offer lower interest rates and do not require collateral, making them a good option.
Q6. What is the EMI for a 50 lakh loan over 5 years?
Ans. Assuming an interest rate of 9% for a 50 lakh loan over 5 years, the EMI would be approximately Rs 1,03,792. You can use online EMI calculators to determine the exact EMI for your loan.
Q7. What CIBIL score is required for a 50 lakh loan?
Ans. A CIBIL score of 750 or higher is generally preferred for securing a substantial loan amount. However, the exact requirement can vary between banks.