What is Business Loan?

Finance received from banks for the purpose of investment in a business by way of working capital and term loan is a Business Loan. The term loan is provided for capital investment like the purchase of plant and machinery, repairs of the existing plant and machinery, to build infrastructure, to expand the existing business, and any other requirement to expand the business to the next level. The working capital finance is to meet the operational expenses.

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Business Loan Details

Interest Rate 14.00% onwards
Processing Fee Upto 3% of loan amount
Loan Tenure Upto 5 years
Lowest EMI per lakh ₹ 2,327 for 5 years

Check Best Offers starting @ 14.00%

  • Compare and get the cheapest business loan offers for self employed individuals
  • Option of Flexi loans and nil prepayment charges are also available
  • Apply business loan online without any security or collateral

Compare Best Business Loan Interest Rates July 2021

Bank Business Loan Interest Rates Processing Fee
HDFC Bank Business Loan Rates 11.90% Rs. 499
IDFC First Bank 19.00% 2.00%
IIFL 16.00% Up to 2%
Bank of Maharashtra 14.50% Upto 3% of the loan amount
IndusInd Bank 13.00% 2.50%
Kotak Bank 16.00% Maximum 2% of the loan
ICICI Bank Business Loan Rates 16.50% Starting from 0.99%, Up to 2%
RBL Bank Business Loan Rates 18.50% 2.50-3.00% of loan amount
Tata Capital Business Loan Rates 19.00% From 1.50% to 2.50%
Lendingkart 12.00% 2% to 3% of loan amount
Bajaj Finserv 18.00% Upto 2% of loan amount
United Bank of India 13.00% 1.15%
Corporation Bank 13.55% 1.5%, Min Rs. 500
Syndicate Bank 12.65% 0.5%, Min Rs. 500
Bank of Baroda 14.10% Upto 1.00%

Documents Required for a Business Loan

Type Documents Accepted
Income proof Balance Sheet and Profit & Loss Account audited by an Auditor with Auditor's report.
Other documents Partnership Deed in the case of Partnership Firm
Articles of Association, Memorandum of Association, and Board Resolution as per the format provided by the lender in the case of a Company.
PAN Card of Partnership Firm/Company
National and State Permit if finance is availed for a commercial vehicle.
Photo ID proof of the promoters PAN Card, Passport, Voter's ID Card, Driving Licence, etc.
Proof of address of the promoters Aadhaar Card, Voter's ID Card, Driving Licence, Utility Bills, etc.
Proof of business GST Registration, Trade Licence, Registration under Shop Act, Drug Licence, etc.
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Eligibility Criteria for a Business Loan

The following are the common eligibility criteria for a Business Loan:

  • A business vintage of a minimum of 2 years with a minimum experience of 5 years in the line of activity will be required.
  • A minimum business turnover and a minimum annual turnover as per the ITR will be required. The quantum of the requirement will vary from lender to lender.
  • The firm/company should be profit-making for at least a period of 2 years.
  • The applicant or the promoters of the business should be in the age group between 21 years or above.
  • Proprietorship/Partnership Firms and Pvt Ltd Companies, Self-employed individuals/professionals engaged either in Manufacturing, Services or Trading, are eligible for the loan.