Business Loan
Starting or expanding a business often requires capital, and one of the most common ways to secure that capital is through a business loan. Whether you’re launching a startup, growing an established business, or managing an unexpected expense, a business loan can be the key to turning your vision into reality. However, before diving into the process, it’s crucial to understand what business loans are, the different types available, and how to choose the right one for your needs.
A business loan is a financial product offered by banks, credit unions, online lenders, and other financial institutions, where a business borrows a sum of money with an agreement to repay it, typically with interest, over a specified period.Starting a business is an exciting endeavour that requires careful planning and financial support.However, securing a loan can be a daunting task, especially if you’re not familiar with the process or the criteria considered by lenders
How to Qualify for a Business Loan
Lenders want to see that your business has a clear and viable plan for success. A strong business plan can demonstrate how you intend to use the loan and how you plan to repay it.
1. Credit Score
Your personal and business credit scores play a significant role in determining whether you qualify for a loan. A higher score generally increases your chances of securing better terms.
2. Business Plan
Lenders want to see that your business has a clear and viable plan for success. A strong business plan can demonstrate how you intend to use the loan and how you plan to repay it.
3. Revenue and Cash Flow
Your business’s financial health is a major factor in the approval process. Lenders will want to see consistent revenue, profitability, and strong cash flow.
Things to Keep in Mind while Selecting the Best Banks for your Home Loan Requirements
1. SBI Bank Business Loan
| Interest Rate | 9.10% p.a |
| Loan Amount | ₹25,000 – ₹500 Crores |
| Tenure | Upto 15 years |
| Factors | Interest Rates (p.a.) |
|---|---|
| For SBI Business Loan to Business Correspondents | 11.40% p.a. |
| For SBI Business Loan for Finance to Food Processing Industry | 9.10% to 11.55% (for MCLR linked loans) and 9.20% to 11.65% (For RLLR linked loans) |
| For SBI SME Gold Loan | 9.75% |
2. Bank of Baroda Business Loan
Depending on the kind of loan that has been taken out, a maximum loan amount may be offered. To find out the maximum loan amount that would be offered, get in touch with Bank of Baroda.
Rate of interest for Mid/Large Corporate/ Non-regulatory/SME expanded advances linked to MCLR
| Rating | Large and Mid Corporate Advances | Non regulatory SME /SME Expanded Advances |
|---|---|---|
| CR-1 | MCLR + 1.25% | MCLR + STRATEGIC PREMIUM + 1.00% |
| CR-2 | MCLR + 1.80% | MCLR + STRATEGIC PREMIUM + 1.25% |
| CR-3 | MCLR + 3.00% | MCLR + STRATEGIC PREMIUM + 2.45% |
| CR-4 | MCLR + 3.75% | MCLR + STRATEGIC PREMIUM + 3.00% |
| CR-5 | MCLR + 4.75% | MCLR + STRATEGIC PREMIUM + 3.85% |
| CR-6 & Below | MCLR + 7.00% | MCLR + STRATEGIC PREMIUM + 6.25% |
For Limits up to Rs. 25.00 Lacs (Regulatory)
| Limits | Micro | Small | Medium |
|---|---|---|---|
| Upto Rs.50000/- | BRLLR+ SP | BRLLR+ SP+2.00% | BRLLR+ SP+2.70% |
| Above Rs. 50000/- to Rs. 2.00 Lacs | BRLLR+ SP+2.00% | BRLLR+ SP+2.20% | BRLLR+ SP+2.70% |
| Above Rs. 2.00 Lacs to Rs. 10.00 Lacs | BRLLR+ SP+2.20% | BRLLR+ SP+2.35% | BRLLR+ SP+2.70% |
| Above Rs. 10.00 Lacs to Rs. 25.00 Lacs | BRLLR+ SP+2.35% | BRLLR+ SP+2.50% | BRLLR+ SP+2.70% |
| For Limits up to Rs. 25.00 Lacs (Non-Regulatory) | MCLR+ SP+2.75% |
|---|
3. HDFC Bank Business Loan
HDFC Bank offers both secured and unsecured business loans to self-employed individuals and business enterprises.
HDFC Bank Business Loan Interest Rates
HDFC Bank Business Loan interest rates range between 10.75% and 25% p.a. The interest rates provided by the lender for its business loans are as follows:
| Particulars | Interest Rates (p.a.) |
| For availing fresh business loans | 10.75% to 22.50% p.a. |
| For business loans for professionals | 11.01% to 14% p.a. |
| For balance transfer of existing business loans from other lenders | 15.75% p.a. onwards |
| For balance transfer of existing business loans for professionals from other lenders | 13.29% p.a. onwards |
| HDFC Bank Sustainable Livelihood Initiative | 11.50% to 19% p.a for SHG and 22% to 25% p.a for JLG |
4. Axis Bank Business Loan
Axis Bank business loan interest rates start from 10.75% p.a. onwards for loan amounts of up to Rs 10 crore and repayment tenures of up to 15 years. Axis Bank also offers letter of credit and bills of exchange.
|
Axis Bank Business Loan Highlights |
|
| Interest rate | 10.75% p.a. onwards |
| Loan amount | Up to Rs 10 crore |
| Repayment tenure | Up to 15 years |
| Loans with tenure up to 36 months | |
| Product | Interest rate (p.a.) |
| Business Loan – SEP | 15.00% – 16.60% |
| Business Loan – SENP | 17.75% – 19.25% |
| Merchant Loan – TL | 18.00% |
| Loans with tenure more than 36 months | |
| Product | Interest rate (p.a.) |
| Business Loan – SEP | 15.00% – 16.60% |
| Business Loan – SENP | 17.75% – 19.25% |
| Merchant Loan – TL | 18.00% |
5. Bajaj Finserv Business Loan
The interest rate on a business loan represents the percentage of the loan amount that the lender imposes as a fee for providing funds to a borrower
Read the fees and charges in detail before applying for our business loan.
Applicable fees and charges
| Type of fee | Applicable charges |
| Rate of interest | 9.75% to 30% per annum |
| Processing fees | Up to 3.54% of the loan amount (inclusive of applicable taxes) |
| Bounce charges |
Rs. 1,500 per bounce. “Bounce charges” shall mean charges for (i) dishonour of any payment instrument; or (ii) non-payment of instalment (s) on their respective due dates due to dishonour of payment mandate or non-registration of the payment mandate or any other reason. |