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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
Loan Match Making
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.
Easy Application
Our application process is user-friendly and seamless. You only need to furnish your mobile phone number, required details and mention your loan requirements.
Loan Tenure at your Discretion
Choose the loan tenure per your convenience. Just ensure the chosen EMI is within your repayment capacity.
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:
Collateral-free Advances
As unsecured loans, financial institutions do not ask for any collateral while sanctioning the loan application.
Hassle-free Documentation
Only a handful of documents are needed while sanctioning business loan applications.
Convenient Repayment Facility
Use a business loan EMI calculator to determine the EMI amount and choose the instalment that best suits your financial strength.
No End-use Restriction Attached
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.
| BANK OR NBFC | INTEREST RATE RANGE |
|---|---|
| Axis Bank | 14.95% to 19.20% per annum |
| Bajaj Finserv | 9.75% to 30% per annum |
| HDB Financial Services Ltd. | Up to 36% per annum |
| HDFC Bank | 10% to 22.50% per annum |
| IDFC FIRST Bank | 10.50% per annum onwards |
| Kotak Mahindra Bank | 16% to 26% per annum |
| Tata Capital | 12% 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
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.
Interest Rates and Other Costs
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.
Repayment Schedule
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.
Company Cash Flow
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.
Lender's Reputation
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 the maximum repayment tenure for a business loan in India?
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.
Can I get a business loan to start a farming business?
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.
