Business Loan

To start any business or to carry on the functionality of the existing business one needs funds. But the question arises from where you can get these funds. A business loan may be the answer to all such questions. What is a business loan? A business loan is something similar to personal loan, but it is specially designed to meet your business requirements and goals. With a business loan, you borrow a certain amount of money for a tenure, with interest rate and monthly repayment option are fixed with the term.

These loans can be secured as well as unsecured. Secured business loans generally have lower interest rates. Apart from a business loan a financial institution may have other kind of products like overdraft facilities to take care of the business needs of the individuals.

Who is eligible for business loan?
The business loan can be offered to any person who is running a legitimate business with a decent earning can apply for a business loan. Different banks have different criteria and terms to validate the authenticity of his/her business. After authentication and validation, banks have the sole authority to decide the amount of loan and even whether it wants to offer the loan to borrower or not. Below are some points which are generally considered before offering a loan:

1. Type of the business: Proprietorship, Partnership, Pvt.Ltd. or Public Ltd.
2. Turnover of the business.
3. Profit of the business.
4. Cash flow of the business.
5. Track record and type of business.

How much Business loan I can get
The business loans are offered on the basis of the profit and numbers of years you are running this business. It also depends upon cash flow and other aspects related to revenue generation. After considering all the major factors, banks come out with eligibility of the loan amount if can offer to any business. The key criteria for approval of any business loan is how profitable the business is and how the borrower will manage to repay the EMIs with other liabilities and expenditures of the company.

From where I can get a business loan.
There are many banks which can offer a business loan to eligible business owners.

The list as follows:

1. HDFC Bank
2. ING Vysya Bank
3. Bajaj Finserv
4. ICICI Bank
5. Standard Chartered Bank
6. SMFG India Credit
7. RBL Bank

All Bank Business Loan Interest Rates Dec 2024

What is the best way to compare business loan?
Compare the below three things before applying for any business loan:

1. Per month's EMI
2. Processing Fee
3. Prepayment charges

If You want to pay the loan in the tenure, the sum of 1&2, whichever is lowest, take the loan from that Bank.
If you think you might have cash flow and can pay earlier, then also check the prepayment charges.

Documents Required for business loan.

1. ID Proof
2. Address Proof
3. Proof of Continuity Of Business
4. Bank statements of last six months.
5. Board Resolution (If Pvt. Ltd. Co. is co-borrower/Partnership Authorization Letter {if partnership firm is co-borrower}
6. ITR & Statement Of Computation of Income - for last 2 Years
7. CA Certified or Audited P/L Acc Statement and for >40 Lacs cases Audit report along with schedules of P&L and Balance Sheet - for last 2 years
8. Latest ITR of Co-Applicants - For last 2 Years
9. Ownership Proof of Residence or Office

Let's have a close look on the business loans offered by some of the reputed banks in India.

ICICI Bank - Get Quote For ICICI Bank Business Loans a. Secured Loans

• Cash credit /Overdraft for meeting working capital finance requirement.
• Export credit to provide pre-shipment and post shipment finance.
• Letter of credit to facilitate trade.
• Bank guarantees for meeting performance and financial obligations.
• Term loans for purchase of commercial assets and business expansion needs.
• Loan amount- up to Rs 50.0 million for working capital and capital expenditure needs.
• Interest rate is linked to ICICI Bank's base rate for fund based facility.
• Low collateral requirement and lending available upto 3 times of the value of collateral.

HDFC Bank - Get Quote For HDFC Business Loans
Features-

• Designed to help businessmen involved in manufacturing, trading and the service industry.
• Loan amount upto Rs 15 lakhs and this amount can be upto Rs 30 lakhs in some selected locations.
• No collateral /guarantor /security required.
• Rack interest rate range 17.5% to 22%.

HSBC Bank - Get Quote For HSBC Business Loans

• Can choose from a range of finance options like export/import financing, discounting of export receivables, bank guarantees for business requirements, treasury line to manage cross currency transaction risk.
• Maximum loan amount upto Rs 10 crores
• MSE( Micro and Small Enterprise) can avail loans upto Rs 10 lakhs without collaterals.
• Flexible quantum and tenor of loans.
• Interest rate is calculated on the prevailing base rate at the time of processing.

SBI - Get Quote For SBI Business Loans
SBI has an array of loan products for small and medium business enterprise-

Manufacturing
SBI SME Collateral Free Loan-

• Borrowers eligible under the scheme will be covered under CGTMSE guarantee scheme.
• No collateral required.
• Maximum Loan amount upto Rs 1 crore.
• Repayment period- Max 7 years including moratorium period.

SME Smart Score

• Available to small and medium enterprise units engaged in manufacturing, trade or services.
• For manufacturing units the maximum loan amount is Rs 50 lakhs and for trade and services units the total limit is up to Rs 25 lakhs.
• Repayment period 5 years excluding moratorium not exceeding 6 months
• The interest rate is floating rate of interest and is linked to base rate.

SMFG India Credit - Get Quote For SMFG India Credit Business Loans

• Maximum Loan up to 30 lakhs without any collateral for self-employed businessman involved in Manufacturing, Trade and service
• Repayment period 12 to 48 months
• Pre-payment facility.

Bajaj Finserv - Get Quote For Bajaj Finserv Business Loans

• Maximum loan amount upto Rs 45 lakhs
• No collaterals or guarantors required.
• Repayment period - 12 to 36 months.

RBl Bank - Get Quote For RBL Bank Business Loans

• Loan amount from Rs. 10 Lakhs upto Rs. 35 Lakhs
• Convenient loan repayment option of 12 to 36 months
• No security or collateral required to avail this loan
• Quick Turnaround Time