Bank

Loan Amount

Business Loan Interest Rates*

Lowest EMI per lakh for Max Tenure

Processing Fee on the Loan Amount

SBI Bank

Rs.
1 Billion Max

11.20%
– 16.30%

Rs.
2,594 for 48 months

2%
to 3%

HDFC Bank

Rs.
50 Lakhs Max

15.50%
– 18.30%

Rs.
2,808 for 48 months

0.99%
onwards. Max 2.50%

ICICI Bank

Rs.
40 Lakhs Max

12.90%
– 16.65%

Rs.
2,270 for 60 months

0.99%
onwards. Up to 2%

Axis Bank

Rs.
50 Lakhs Max

15.50%
to 24%

Rs.
2,405 for 60 months

Up
to 2%

RBL Bank

Rs.
10 Lakhs Max

20.00%
– onwords

Rs.
2,649 for 60 months

3%

Kotak Bank

Rs.
75 Lakhs Max

16.00%
– 19.99%

Rs.
2,432 for 60 months

Up
to 2%

Lendingkart

Rs.
1 Crore Max

18.00%
– onwords

Rs.
9,168 for 12 months

2%

Bajaj Finserv

Rs.
30 Lakhs Max

Interest
rate 18% onwards

Rs.
2,938 for 48 months

Up
to 2%

Deutsche Bank

Rs.
50 Lakhs Max

24.00%

Rs.
3,923 for 36 months

Up
to 3%

Edelweiss

Rs.
30 Lakhs Max

18.25%
onwards

Rs.
2,553 for 60 months

2%
onwards

Fullerton India

Rs.
50 Lakhs Max

16.00%
onwards

Rs.
2,834 for 48 months

2%

Tata Capital

Rs.
50 lakhs Max

18.00%
onwards

Rs.
2,938 for 48 months

1.50%
to 2.50%

Ziploan

Rs.
5 Lakhs Max

Interest
rate 1-1.5% per month(Flat).

 

3%

 

Corporation Bank offers the cheapest business loan rate of interest of 13.50%. Thes type rates can vary depending upon your annual turnover, number of years in business, loan amount you have applied for and your repayment capacity. Upper the loan amount, lower will be the rate of interest.

How to take a business loan from banks & nbfcs ?

If You Want  to apply for a business loan through the traditional channel of visiting a bank branch or through a DSA. However, if you are looking for quick business loans, you can simply apply online at PAISAPAID.COM.

You can compare loan interest rates online and also use online Eligibility Calculator to get a rough estimate of your business loan eligibility.

You can fill your basic personal, business and income details, you will recive a list of best bank business loan offers.when  we receive your details and also the bank offers you are interested in, we will work  faster and closely with our partner banks to ensure that you get best business loans at cheapest rates. PAISAPAID.COM representatives will coordinate with you and partner banks throughout the loan process to ensure that you find  quick and easy approval with minimal paperwork.

Types of Business Loans Secured Loans for Businesses

These loans are those which are taken against some type of personal guarantee or any asset as collateral. term loans Inventory loans, equipment loans,  and loan against property are secured business loans.

Unsecured Loans For Businesses

In such types situations, businessmen and self employed prefer to take unsecured business finance with no collateral requirement because of the following reasons:

  • Short turnaround time of 7 -12 working days as compared to secured loans
  • No need any collateral or security required to borrow this loan
  • Reduces your dependence on friends, relatives or money lenders for borrowing for urgent or seasonal business expenses

 

Business Loan Eligibility

Banks use multiple factors to calculate the loan amount elibility of its borrowers. PAISAPAID.COM Business Loan Eligibility Calculator uses the following factors to give you an estimate about your loan eligibility, amount of loan and best interest rate offer.

 

Parameters

Business Loan Eligibility Criteria

Eligible Entities

Self employed non professionals – Sole proprietors, partnership
firms, private limited companies, public limited companies involved in the
business of manufacturing, trading and services
Self employed professionals – Doctors, CA, CS, Architects.

Age

21 – 65 years

Loan Amount

₹ 50,000
to ₹ 25Cr

Interest Rate

14.50% – 22.00%

Loan Tenure

Up to 5 years

Business Vintage

For selfe mployed professional – 3 years
For self employed businessmen – 3 to 4 years

Annual Turnover

₹ 1 Cr
and above

Banking Stability

6 months and above

CIBIL Score

650 or above

Other Eligibility Conditions

Borrower should have a self owned house or work place

Factors that depends eligibility for Business loan are

  •  
  • Eligible Age– Banks consider customers with age of 21 years to 65 year
  • Loan Amount–  ₹ 50,000 to ₹ 100 Cr can be availed on business loan. Big  loan amount,increse chances to get low interest rate.
  • Loan Tenure– Business loans are unsecured loans and given for a tenure of 1 year to 5 years.
  • Income Tax Returns (ITR)– A self employed can find a business loan, only when it has filed regular ITRs for the last four years.
  • Banks consider borrowers who have filed ITRs of 3 years or more as eligible to get a business loan. Banks evaluate your monthly income and repayment capacity depends on details submitted in the ITRs.
  • Turnover– Turnover is the income that a business enterprise has earned from the sale of goods and services to customers. It is also termed as sales or turnover.
  • In case of professionals, this sales or revenues is measured in terms of Gross Annual Receipts. Most banks and NBFCs ask for a minimum annual turnover of ₹ 1 Cr to be eligible for business loans without collateral. However, there are a few NBFCs and banks which fund  to businesses or self employed with turnover of less than Rs. 25 lakh as well.

 

  • Business Vintage – Business vintage and growth is an important factor consider by banks and NBFCs to take a decision to fund you loan. It gives the bank or NBFC an assurance that your business should be authentic, stable and  profitable to repay their loans.
  • Banks basicaly  look for a business stability or profitability of minimum 3 years for self employed professionals. In case of any other businessmen, lender companies require a minimum business continuity of 5 years  Banks and NBFCs also specify the minimum growth rate of 15-20 % in sales or turnover for the last 3 years to be eligible for a business loan. Further, your  business or enterprise should be profitable in the last 2 years.

Banking Stability – Lenders a check bank statements of minimum 6 months of your operational banking accounts to approve your loan. Banks will evaluate your banking stability and repayment capacity depends on your average account balance. Banks will also consider your outward and inward cheque bounce information to take a view on your credit track history.

How to improve chances of getting a Business Loan ?

In case of unsecured loans, every has its own set of policies. If the borrower does not fulfil the bank’s eligibility criteria, the bank rejects his/her loan application. So, here are few tips which will help you to improve your chances of getting your loan application improved. 

 

 

Improve Credit Score – First of all, identify the factors that have resulted in a low credit score. Credit score can be adversely affected due to late payment of credit card or default in outstanding loan EMI payments. Defaulting and late payments, both result in bad credit score. It is extremely important to maintain healthy credit repayment track record and make all your payments on time. 

 

 

Always ensure that you have adequate balance in your bank account to make ECS transactions.

Avoid multiple loan applications – Sometimes, you apply for business loan with multiple banks in order to improve your chance of getting loan on time. However, applying for loan at many banks at the same time increases the chances of the loan being rejected as each query captured in  your credit report. Customers are also unaware that any loan that is rejected by a bank, has a less chance of getting an approval at other banks as well. Banks tend to become more cautious in lending to customers who have been rejected by other banks. 

 

 

Choose your Bank wisely – Research the banks which are offering best business loan interest rates. Opt for a bank which offers fast service with low interest rates. You must also calculate your loan eligibility using PAISAPAID Eligibility Calculator to get an estimate of your loan eligibility and your ability to service loan repayments from your monthly cash flows. You can apply for a quick business loan through PAISAPAID.COM to get best deals on rates and processing fee from top banks in India 

 

 

Business Existence – Generally, banks give loan to businesses with minimum business existence of 3 years. For new businesses, start-ups and loss making businesses,chances of getting an unsecured business loan is low. In this case, you should explore options of secured business loans. 

 

 

Apply for a loan amount based on your repayment capacity – Determine the loan amount that you can easily repay in future. If you apply for a loan amount which is higher than your eligibility, it can create doubt in the mind of lender and lead to rejection of your loan application. So, make sure you choose the correct loan amount that you can comfortably service. 

 

 

Maintain proper accounts and financial information- As a business owner, it is extremely critical that you have your GST registration in place. Also, it is advisable to keep audited record of your financial statements, as the same are an important set of documents referred to by the bank at the time of calculating your eligibility. 

 

 

Regularly check your CIBIL Score: As a business owner which can need to borrow instant from banks, it is advisable to access your cibil score report on a regular basis and do regular timely corrections in your report. 

 

 

How to get a high business loan eligibility?

If you are businesss owner, then there could be a possibility that your reported income is lesser than your real income. Many banks and NBFC have specific programs which offer you a higher eligibility based on an estimate of your real income and not entirely on the basis of your reported income. If you visit a traditional bank for this loan, chances 

 

 

are that you will be eligible for a lower loan amount. There are few lenders which offer surrogate products to calculate your correct eligibility and offer you higher loan amount based on your estimated income. Some of these popular loan products are:

Lenders consider banking surrogate program to define your eligibility. This helps in calculate your net income. Banks check your 12 month banking behavior to estimate your average bank balance. Your net income is the multiplier of your average monthly balance and if you well maintain your bank balance then it won’t come your way to get your loan sanctioned.

ITR program also helps to calculate eligibility in case you do not have audited financial statements of your company.
Lenders are strict to the fact that they need income tax report of past 3 years. ITR of 3 years is important to estimate your income, profit and losses of your business and other deductions. It also shows your tax refund or tax liability.

Some banks offer turnover program in which your loan amount eligibility is based on the turnover of your company.
Annual turnover eligibility can be different for different industry segments. Few banks consider minimum annual turnover of Rs 15 lakh for service providers ,Rs. 25 lakh for manufacturers and Rs. 50 lakh for traders. However, there are few Lenders which give small business loan for low turnovers and loan amount. Industry margin is pre-decided by lenders for specific industry segment in which customer falls. Industry margin is used as a multiplier to the turnover of your company that helps in determining your income.

Your income eligibility is calculated as : Industry Margin * Turnover –Obligations. Your eligibility will be higher if your turnover is high. However,banks consider bank statement and GST returns of 12 months to know your real income which is higher than what you have mentioned in books.

Compare Business Loan Rates and other charges

  • Business Loan Roi  Roi on business loan based on your business, the loan amount you have applied for and your past credit history.Current rate of interest on business loan starts at 13.50%.Processing fees – Some banks charges minimum processing fees of 1.5% to 3% on loans.To get low fee, comparison of business loan roi, offers and cashback applying online through PAISAPAID.COM.

 

  • Insurance premium – When these loans are unsecured loans, it is suggestion to take an insurance policy like life and accidental insurance by the name of the customer when taking a loan. Some banks give insurance coverage to the owner of the company to protect the financial risks in case of any emergencies.
  • However, the premium different from bank to bank depending upon the risk coverage under different policies and
    loan amount borrowed by the applicant. So, check the loan terms of the bank carefully to know the coverage and premium. And consider other banks and insurance companies also who offer good insurance plan for the same amount.
    Prepayment and foreclosure – You do not need to keep paying interest on a loan when you have surplus money available to repay it.When you repayment of your loan partially before time, its called part prepayment. In case you decide to pay the Full loan amount before time, it is called foreclosure. Lenders typically levy prepayment or foreclosure charges in such as time and these can be up to 5%. So, check carefully if the low rate of interest you are getting comes with high prepayment or foreclosure charges. Note that some business loans cannot be repaid before time.

Documents required for Business Loan

Signed Application Form
Identity Proof (PAN)
Residential Address Proof
Last 3 years ITR (self and business), complete financial certified/audited by a CA.
Last 12 months bank account statement (self and business)
Certificate and Proof of Business Vintage/Gst menditory
Office address – ownership/ rent agreement/ utility bill

 

Individuals

Firms, Partnerships

Identity Proof

PAN card, Passport, Driving License, Aadhar Card, Voter id, Govt
issued i-card

 

Certificate and Proof of Business Existence

 

PAN , sales tax/ excise/ VAT/ service tax registration, Copy of
partnership deed, Trade license, certificate of practice, registration
certificate issued by RBI, SEBI

Address Proof

Passport, Driving License, Election ID card, Electricity/
Telephone/ Mobile bill/ bank statement (not more than 3 months old)

Bank statement, utility bill, Registry copy, lease or rent
agreement, TAN allotment letter

Questions-Answere on Business Loan

Which bank is best for business loan?

Corporation Bank of india is the best lender for taking a business loan based on their current interest rates as they offer low interest rate of 13.50%.

Do banks provide loans to SME in India?

Some lenders of the top public sector and private sector banks give small business loans in India under different govt schemes like Mudra loan,etc. In addition to govt schemes, select banks and finance companies also offer unsecured loans to SME with an annual turnover of Rs. 1 crore and above depend on an assessment of business financials, stability, profitability, debt servicing capability and management reputation. Some of the new NBFCs have started offered business loans without collaterals for even smaller businesses, though the rate of interest on such loans tend to be higher than that offered by banks.

Apply Business Loan in my current city.                                                                                                 

Yes, you can apply business loan online in your city provided you have sufficient turnover, business stability and have good credit history. You can also compare business loan offers for different cities at Paisapaid.com Business Loan All over in India

Customer age to apply for business loan!

Customer age should be atleast 21 years old and not more than 65 years of age.

Does -1 CIBIL history affect business loan?

Yes, banks may be reject your loan if you do not have a CIBIL history or poor CIBIL history in past . In that case, you have to opt for a loan with higher rate of interest. Banks offer to you for gold loan or credit card to build some CIBIL history before you apply for a loan.

factors affect my business loan interest rate!

Roi on business loan can be affected many factors like

Higher the loan amount, lower will be the rate of interest
Higher the business turnover, lesser will be the interest rate
Longer time in business can avail you loan at lower rates
Reduce EMI on business loan

You can decrease your loan EMI if the lender offers part prepayment or full prepayment. Some banks allow prepayment after repayment of 6-12 EMI’s and some banks allow after 1 EMI only. So, you can easily opt for prepayment of loan if you have surplus amount and want to lower your burden finish your loan

How can I apply for business loan?

You can apply in many ways. You can directly visit the bank branch and meet the sales person, contact a loan agent or apply online at any bank or NBFC’s website. You can also compare business loans rate of all banks online at PAISAPAID.COM and apply for loan. We can connect you to banks with best loan offers at lowest rate of return. We also assist you throughout the loan process and allow you to apply online for a loan without a taking long time process.

Minimum and maximum tenure of business loan!

These are business loan generally taken for a short period of time. Generally, the loan tenure is between 1 Years to 5 years .

What are the charges for unsecured business loan?

In addition to rate of interest, banks charge the following two fees on loan.

Processing fee: Processing fees is charged when you apply for a loan. The processing fee can range up to 3% of the loan amount.If you apply for loan through an online market place like Paisapaid.com then we negotiate with the bank on your behalf and also, offer attractive cash backs on sanctioned loans.

 

Does it affect my co-applicant if I default in business loan?

Yes, if you unable to pay the loan on time then it will also affect your co-applicant as default in loan will affect his/her CIBIL rating.

Am I eligible for a business loan despite a poor credit score?

Yes, you may be eligible for qualifying a business loan even with a bad credit score. But, the lenders may charge a higher rate of interest on your loan and may ask you to apply for loan along with a co-applicant who can take the responsibility in your absence.

time for a business loan to get disbursed!

Business loan disbursement can take approximately 10 working days after all the documents are submitted. Some lenders give you an in-principle approval subject to verification of documents submitted by you and the results of their field visits. In that case the loan disbursement process can also be as short as a week.

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