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How to Get the Best Business Loan in India for the Startups?

by ideaschedule
Business Loan in India

Starting and running a successful business requires a great idea and a sizable financial commitment. Receiving a Business Loan in India could provide you with the capital you require to achieve your objectives, regardless of whether you are an aspiring company looking to start your first venture or an established company looking to expand.

However, considering the variety of loan options accessible, it could be difficult to select the ideal one for your business’s needs.  

Hence, with the help of this article, we want to give you a thorough overview of all of your alternatives for the Best Business Loan in India.

What Is A Startup Business Loan?

Startup loans are loans made by financial organizations to enterprises in exchange for a promise to repay the capital in the future, together with the Interest Rate for Business Loan in India determined by the institution. Businesses can utilize this loan for working capital, addressing short-term cash-flow needs, purchasing plant and machinery, and so on. The founders gain from leveraging startup business financing in a variety of ways.

Some advantages of leveraging startup business loans include:

  • You have sufficient capital to expand your business operations. 
  • You are not required to give up any of your equity or ownership.
  • You can improve your business credit score in preparation for future loans.
  • You can safeguard your fortune against unprecedented loss.
  • Furthermore, you are not required to report your company’s profit and loss to the bank.

There are certain advantages to acquiring a new business loan, but there are also some negatives. The following are some disadvantages of leveraging startup business loans:

  • It is difficult to qualify for the loan! Different lenders have different requirements, and new businesses may struggle to meet them.
  • The payments are made every month and can limit your cash flow.
  • Nonpayment of EMIs might permanently harm your credit score.

General characteristics of a beginning business loan are as follows:

Interest Rate on Business Loan in IndiaUpto 21% annually
Amount of LoanUpto INR 75,00,000
Tenure of LoanUpto 5 years
Processing ChargesUpto 6.5% of the amount of loan including GST 


Who can get a Small Business Loan in India?

A Small Business Loan in India can be obtained for the launch of a business by an individual or by a group of individuals who have joined forces to form one. This loan can also be used by an already-existing company to finance other expenses such as equipment purchases, inventory stocking, R&D investments, expanding operations or service offerings, and other costs.

However, there are a few conditions for business loan applicants’ eligibility and supporting documentation:

  • 21 as the minimum age and 65 as the maximum
  • Indian nationality
  • Authentic Aadhaar and PAN cards
  • Statement of funds for the last six months
  • Proof of signature
  • Evidence of company ownership or a thorough business plan

Business Loan in India 2023

Here is an overview of some of the Best Business Loans Banks with their respective Interest Rate on Business Loan in India:

1) HDFC Bank Business Loan

Businesses and independent contractors can apply to HDFC Bank for secured and unsecured Best Business Loans.

Among the business lending products offered by HDFC Bank are cash credit, bank guarantees, letters of credit, bill discounting, dropline overdraft facility, overdraft, pre-shipment financing, import credit, export bill collections, etc.

Furthermore, the lender provides a range of business loan programs, including HDFC Bank Term Loan, HDFC Bank Business Loans for Traders, HDFC Bank Business Loans for Manufacturers, HDFC Bank Business Loans for Chartered Accountants, HDFC Bank Business Loans for Doctors, and HDFC Bank Terms for Small Businesses and Contractors.

Rate of Interest: 1.90% p.a. to 21.35% p.a. (rack interest rate)

Loan Amount: Up to ₹40 lakhs (In some areas up to ₹50 lakh )

2) Axis Bank Business Loan

Axis Bank provides business loans with 15-year payback terms and interest rates as low as 11.25% p.a. for loans up to Rs 10 crore.

Axis Bank offers business loans ranging from ₹50,000 to ₹50 lakhs, with interest rates contingent upon your company’s profile, loan amount, financial circumstances, loan duration, and credit history.

Axis Bank also offers letters of credit and bills of exchange. Axis Bank makes an EMI-based, collateral-free loan to a business entity for the purpose of expanding and growing the existing firm.

Based on several factors, the processing charge ranges from 1.25 percent to 1.50% of the approved loan amount. The borrower is required to pay an additional 2% per annum in interest if an installment is missed.

Rate of Interest: 11.50% to 20%

Loan Amount: ₹50,000 to ₹50 lakh

3) ICICI Bank Business Loan

ICICI Bank offers secured and unsecured loans with interest rates as high as 17% p.a. and payback durations of up to 7 years.

The bank provides business loans to importers and exporters, newly formed companies, businesses without audited financial statements, etc.

An ICICI Bank Business Loan will provide you with the crucial financial support you need to start your company’s vision.

A variety of loan options are provided by ICICI Bank to meet the demands of the business sector. Numerous commercial buildings across the country have been built on the basis provided by these loan packages.

Many would-be entrepreneurs have long resorted to ICICI Bank Business Loans to pursue their dreams of being successful business owners in this country because of its easily adjustable business loan choices, rapid processing, and uncomplicated loan application process.

Rate of Interest: For security-equipped facilities: 6.0% (non-PSL) + repo rate

Facilities supported by CGTMSE: up to repo rate plus 7.10%

Loan Amount: Up to ₹2 crores

4) Kotak Mahindra Bank Business Loan

One of the Best Bank For Business Loan in India, Kotak Mahindra Bank, offers loans with durations as long as seven years to suit the demands of applicants and their enterprises.

The bank also provides several commercial loan options, such as loans for farm equipment, loans for projects and crops, loans for commercial vehicles, loans against property, and healthcare financing options.

It offers a selection of working capital business loans, including loans against Credit Card Receivables, Agri SME Business Loans, Dealer Finance, Channel Financing, and Infrastructure Finance.

Interest Rate: 12.99% to 14.50%

5) IDFC First Bank Business Loan

Self-employed individuals, salaried professionals such as CAs and physicians, MSMEs, dealers, manufacturers, hospitals, and diagnostic centers can all apply for business loans from IDFC First Bank to meet their working capital requirements.

Furthermore, it offers loans against property to corporations and salaried, self-employed persons for all types of commercial, residential, and industrial assets.

IDFC First Bank applicants may also be eligible for a lease rental concession offset by rental earnings. It also exports IDFC First Bank’s one-of-a-kind Gold Card working capital credit program.

Interest Rate : 10.50% p.a. onwards

Loan Amount : Based on the characteristics of the candidate

6) SBI Business Loan

Small business entrepreneurs in manufacturing, services, and wholesale/retail trade can apply to the State Bank of India for Simple Small Business Loans (SSBL) to purchase the fixed and current assets required to expand their businesses.

The loan amount might range from 10 lakhs to 25 lakhs, with a maximum payback duration of 5 years. This loan is a dropline overdraft facility with a 40% minimum collateral requirement and a 10% margin requirement (in stock and receivables).

Interest Rate : According to business requirements and linked to MCLR*

Loan Amount: Between ₹10 and ₹25 lakh**

How to Get a Business Loan in India?

If you don’t have idea about How to Get a Business Loan in India, there here is guide to apply for the loan

  • You can apply for the loan online by going to the lender’s website. Most suppliers give an online form that must be completed and submitted along with other papers.
  • You can go to the lender’s nearest branch office and acquire an application form, which you can fill out and submit along with the required documentation.
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