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What are Business Loans

What are Business Loans?

A business loan is a type of unsecured credit instrument that business owners can apply for in order to fund planned as well as urgent business-related expenses.

Further, leading financial institutions and NBFCs offer business loans at competitive interest rates and do not demand any collateral against the borrowed sum.

Choose Credmudra For The Best Business Loan

Prompt Loan Disbursal

With us, the TAT of borrowing a business loan is reduced to meet your financial requirements without wasting time. We promise to sanction and disburse the loan amount the same day.

Just apply for the loan, submit necessary papers and relax. We will do the rest. Finding the right lending partner that matches your requirements is what we do. And we do it best.

Our application process is user-friendly and seamless. You only need to furnish your mobile phone number, required details and mention your loan requirements.

Choose the loan tenure per your convenience. Just ensure the chosen EMI is within your repayment capacity.

Choose Credmudra For The Best Business Loan

Features And Benefits Of A Business Loan

If you are planning to apply for a business loan, you must know the following features and benefits of this credit facility:

Instant Disbursal

The requested sum of money gets credited to your account real quick once the application and documents are verified successfully. If you choose Credmudra, the wait time is minimal. Moreover, you can get the amount credited the same day.

As unsecured loans, financial institutions do not ask for any collateral while sanctioning the loan application.

Only a handful of documents are needed while sanctioning business loan applications.

Use a business loan EMI calculator to determine the EMI amount and choose the instalment that best suits your financial strength.

You can use the borrowed sum to fund any business expense without any obligation or restriction from the lender.

Interest Rates On Business Loan Offers

Please check the applicable interest rates on business loan offers extended by several leading financial institutions in our country:

You must note that these interest rates are subject to change without any prior notice. Further, the applicable interest rate will depend on your eligibility for the credit facility. Hence, contact your lending institution in order to know the actual interest rate applicable to your business loan.

Axis Bank14.95% to 19.20% per annum
Bajaj Finserv9.75% to 30% per annum
HDB Financial Services Ltd. Up to 36% per annum
HDFC Bank10% to 22.50% per annum
IDFC FIRST Bank 10.50% per annum onwards
Kotak Mahindra Bank 16% to 26% per annum
Tata Capital12% per annum onwards

Eligibility Criteria For A Business Loan

Eligibility Assessment Made Easy: Find Out If You Qualify in Under 3 minutes*

Business owners, individuals, entrepreneurs, MSMEs, startups and self-employed professionals, such as CS, CAs, architects and doctors

Public and private limited companies, partnership firms, sole proprietorships, LLPs

Large enterprises dealing only in trading, services and manufacturing sectors

Co-operative societies, NGOs and trusts

  • Age: 21 to 65 years old

  • Employment type: Self-employed

  • Business tenure: At least 1 year or more

  • Minimum yearly turnover: Vary across lenders

  • Credit score: 750 or more

Note: The above-mentioned details can vary from lender to lender depending on their terms and conditions.

Documents Required For A Business Loan

Along with fulfilling all the eligibility parameters, you will have to submit some documents in order to get loan approval.

  • Passport-sized photographs

  • KYC documents, such as Aadhaar card, PAN card, driving license, passport, electricity or water bills, voter ID card

  • Previous 1 year's bank account statement

  • Non-collateral overdraft copy (if applicable)

  • Copy of business incorporation paperwork

Step-By-Step Process To Apply For Business Loan

Here is the stepwise process you need to follow to apply for a personal loan online through Credmudra:

What Are The Types Of Business Loans?

Based on your requirement, you can opt for any of the following types of business loans:

  • Term loan

  • Working capital loan

  • Bill or invoice discounting

  • Letter of credit

  • Point-of-Sale loan

  • Overdraft

best business loan for your firm

Factors To Consider Before Taking A Business Loan

You must take into account several essential factors while you decide on the best business loan for your firm.

Purpose of the Loan

In order to make the best use of borrowed money, you must know your financial needs before applying for credit.

For example, you must determine what equipment you need to buy if you are opting for a loan to upgrade your business. This will help you determine the exact amount you need and what type of business loan you should opt for.

To get the best deal, you must compare the interest rates offered by different lenders. Based on the comparison, choose a lender that offers the lowest interest rate.

Further, you should keep an eye out for additional costs, such as processing charges, foreclosure fees, etc. These costs add up to the total loan amount.

Make sure you know all the repayment terms of the credit you are applying for. Factors, such as business loan length, repayment schedule and charges associated with early and late payments should be known by every borrower.

Assess your business's cash flow in order to determine your repayment capability. This will help you make a repayment plan and save from a financial burden.

Do thorough research about the financial institution or NBFC you are choosing. Learn about the lender's reputation in the market, customer service, etc. You can look for ratings and reviews from previous borrowers in order to learn more about a financial institution.

Credmudra has partnered with some of the leading business loan providers in India. With our user-friendly interface and paperless loan application process, take a step closer to reaching your business goals. Nevertheless, if you face any issues while applying for a loan from our portal, contact our Mudra Mentors to receive comprehensive assistance.

FAQs On Business Loans

What is a good credit score to apply for a business loan in India?

Financial institutions and NBFCs usually consider a Credit score of 750 or above as a good credit score for a business loan.

The maximum tenure for an unsecured business loan can be up to five years. However, repayment tenure for a credit facility varies from one lender to another. Hence, you should get in touch with the lenders in order to know their repayment terms and other details.

Yes, you can get a business loan to start a farming or agriculture business. Once you make an application, submit the necessary documents and get verified, you will get the money to fund your business expenses.



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