HDFC Business Loan

To self-employed persons and business entities, HDFC Bank offers secured and unsecured business loans starting at 10.75% p.a. for loan amounts up to Rs 3 crore and terms up to 7 years.

ICICI Bank Business Loan

Importers, exporters, new entities, companies without audited financial statements, etc. can apply for secured and unsecured business loans from ICICI Bank. For a maximum of seven years, the interest rate on an ICICI business loan may increase to 17% annually.

Axis Bank Business Loan

The interest rates for business loans from Axis Bank start at 17.15% per year and go up to 15 years. Axis Bank offers business loans to prospective clients with maximum loan amounts of Rs 10 crore. In addition, the bank provides Letters of Credit and Bills of Exchange to applicants for business loans.

How Do I Apply Online for a Business Loan?

Direct online applications for business loans are accepted from individuals, groups of individuals, and entities via the official websites of banks and NBFCs. Lender to lender differs in terms of interest rates, loan amounts, margin, collateral and guarantor requirements, fees and charges, eligibility, and other aspects of business loans.

In order to choose the lender that best fits their eligibility, applicants should visit online financial markets such as charvifFinservices.com to examine the interest rates, loan amounts, and other features provided by different lenders.

Charges & Fees for Business Loans

Lenders of business loans typically impose penalties for late payments, processing fees, commitment costs, inspection fees, account servicing fees, penal interest, and documentation fees on their clients.

On the other hand, different lenders impose different fees and charges on business loans. The general range of a few fees that the lenders impose on business loans is listed below.

Features & Advantages of a Business Loan

The characteristics of business loans provided by different lenders are listed below:

• Both secured and unsecured business loans are provided by the majority of banks and NBFCs.
• Interest rates for business loans differ between lenders and are determined by:
  • The applicant's credit history
  • The type of business being financed
  • The type of loan being issued
  • The type of collateral or security
• Many banks and NBFCs allow their current business loan borrowers to apply for top-up loans in addition to their current business loans.
• Additionally, a lot of lenders provide overdraft protection to their current business loan clients.
• Certain lenders offer pre-approved business loans with rapid loan disbursement and little documentation requirements to both new and existing customers.
• Women borrowers are eligible for discounted interest rates from several lenders.
• Applicants may also apply online for business loans, which will be approved quickly and disbursed with little paperwork.

Qualifications for a Business Loan

Typically, lenders base their determination of who is eligible for a company loan on the following factors:

• Age: May vary between lenders, typically 21 years at the time of loan application and 65 years at loan maturity.
• Business Vintage: Minimum of 3 years, with some lenders requiring up to 5 years.
• Minimum Revenue for a Business: Ranges from Rs 90,000 to over Rs 250 crore.
• Credit Score: At least 750 (though lenders may grant business loans to borrowers with lower credit ratings).
• Minimum Annual Income: Rs 1 lakh.
• Eligible Entities:
  • Entrepreneurs
  • MSMEs
  • Limited Liability Partnership businesses
  • Private Limited Companies
  • Public Limited Companies
  • Self-employed professionals (e.g., doctors, CAs, CSs, architects, etc.)
  • Individual corporations

Documents Needed for a Business Loan

Applications for business loans often need the following paperwork to be processed.

• ID Proof: Driver's license, voter ID, Aadhar card, passport, PAN card (for individuals, businesses, and partnership firms).
• Proof of Address:
  • Phone and power bills
  • Voter ID
  • Passport
  • Bank statements
  • Driver's license
  • Registered lease agreement or sale contract
  • NREGA card
• Proof of Age: Passport, Aadhar card, PAN card, birth certificate, etc.
• Evidence of home or office ownership.
• Proof of business continuity.
• Copy of PAN card for the company.
• Evidence of business registration.
• Passport-size photos.
• Most recent GST returns.
• Last six months' worth of bank statements.
• Most recent ITR certified by a CA, including income computation, balance sheet, and profit & loss accounts for the previous two years.
• Declaration or certificate for a sole proprietor.
• Copy of the partnership deed.
• Certified copy of the board resolution, AOA (Articles of Association), and MOA (Memorandum of Association).

Different Business Loan Types

Typically, lenders provide the following kinds of company loans:

Secured Term Credits

Without requiring any security or collateral, lenders provide MSMEs with Unsecured Term Loans to help them achieve their company needs, including expanding their operations, upgrading their technology, and managing cash flow requirements.

Term Loans with Security

Secured Term Loans are provided in exchange for financial instruments, real estate mortgages, applicant's current business assets, and other types of collateral.

Unsecured Business Overdraft Loan

With an unsecured overdraft business loan, an applicant can take out cash from their existing business accounts up to a pre-established limit—even if they have a zero balance—without the need for collateral.

Secured Business Loan with Overdraft

In order to support their present clients' business operations and cash flows, lenders provide Secured Overdraft Business Loans while they keep their current or savings accounts open. The credit line facility is available against LIC policies, KVP/NSC, fixed deposits, mutual funds, and other financial products in addition to residential, commercial, and industrial real estate.

Expert Business Credit

Self-employed professionals like physicians, architects, chartered accountants, and computer scientists are eligible for Professional Business Loans. Professionals who are self-employed are eligible to apply for this loan program in order to fund their working capital and company needs, such as expanding their firm, building new offices, buying furniture, fittings, machinery, stocking up on medical supplies, etc.

Discounting Bills

Through bill discounting, companies can get paid in advance for their outstanding invoices. The lender receives the bill that the borrower has drawn on his client and pays him right away, subtracting a fixed amount for commission or discount. On the day the bill is due, the lender then obtains full payment from the borrower's client. The borrower or customer is required to pay the bank or NBFC a predetermined interest rate in the event of any delay.

Finance for Machinery

A financing product called Machinery Finance enables applicants to buy machinery and equipment for their businesses.

Purchasing Funding

To cover the cost of trading items and raw materials that manufacturers, traders, and service providers buy from suppliers, lenders provide Purchase Finance.

Loans for Working Capital

Working capital loans are provided by lenders to help business units with their daily expenses, such as paying salaries and purchasing raw supplies.

Credit Letter

A letter of credit (LC) is a payment guarantee that a lender issues to help companies involved in international trade reduce their credit risk.

Cash Advance for Merchants and Point of Sale

This loan program is available to small and medium-sized businesses that use Point of Sale (POS) devices or conduct online sales. Repayment is done by deducting the amount from the business's online or POS machine sales.

Which Type of Loan—Personal or Business—Best Meets Your Needs?

While personal loans can be used for both personal and business purposes, business loans are specifically meant to finance business-related activities, such as business expansion and working capital raising. Business loans can be either secured or unsecured, whereas personal loans are typically unsecured.

Personal loans are available as overdraft facilities or term loans with EMI-based repayment. However, business loans come with more diverse options, such as term loans, overdraft facilities, and other credit-based solutions tailored for businesses.

5 Things To Consider Before Filing A Business Loan Application

Prior to submitting an application for a business loan, applicants should be aware of these things:

• Interest Rate: Lenders offer different interest rates for business loans. To save money on interest, applicants can compare the interest rates being given by several lenders and choose the one with the lowest rate.
• Turnaround Time: Potential borrowers should be aware of how long a bank or NBFC will take to approve and disburse a business loan. Generally speaking,
• borrowers choose lenders who provide business loans faster. The kind of business lending program and the kind of collateral pledged would determine the turnaround time.
• Credit Score/Rating: Candidates with credit scores of at least 700 are often more likely to get approved for business loans. Additionally, some lenders provide business loans with cheaper interest rates to borrowers with excellent credit ratings.

FAQs Regarding Business Loans

How Do I Apply for a Loan for a Business?

Applicants seeking business loans can apply directly at bank branches or via the official websites and applications of banks and NBFCs. They can also evaluate interest rates and other features provided by different lenders by visiting online financial markets such as Charvi Finservices.

What is the Business Loan Interest Rate?

Interest rates on business loans can differ significantly based on the lender, the plan chosen, the kind of collateral pledged, and the applicant's eligibility for any applicable government subsidies. Although the majority of lenders have not made their interest rates available to the public, they typically begin at 9% per year for their various business loan programs.

For whom is a Business Loan Eligible?

The following entities are eligible for a business loan: MSMEs, Limited Liability Partnership Firms, Proprietors, self-employed professionals (CA, CS, doctors, architects), self-employed persons, Private Limited Companies, Public Limited Companies, etc. However, based on the company loan plans that are chosen, different lenders would have different qualifying requirements.

Which Records Are Necessary for a Business Loan?

The paperwork needed for a business loan varies depending on the lender. But when applying for a business loan, lenders typically need certain common documents: proof of address (utility bills, phone bills, electricity bills, sales agreements, registered lease deeds, NREGA cards), proof of residence or office ownership, proof of business continuity, proof of business registration, and the most recent ITR. in h3 or p tag in h3 or p tag

What Bank Offers the Best Business Loans?

When applying for a business loan, applicants typically look for lenders with the lowest interest rates because doing so will enable them to save money on interest overall.

While searching for the best bank for business loans, applicants take into account a number of factors in addition to the interest rates on the loans, including the loan tenure, loan amount, margin, kind and value of collateral, charges, loan guarantee requirements, repayment period, and loan disbursal turnaround time.

Applicants can streamline their search by comparing the business loan interest rates and other features given by different lenders by visiting online financial markets like Charvi Finservices, rather than visiting the official websites of many lenders.

What Uses Are There for Business Loans?

Business loans can be used to finance working capital needs, such as buying inventory or raw materials, paying salaries or wages, paying rent, etc., and capital expenditure needs, such as buying machinery and equipment, acquiring other fixed assets, and engaging in other activities for business expansion.

How can I apply for a small business loan?

You can visit a bank office or apply for a small business loan via the official websites of banks and NBFCs. You can also compare the interest rates provided by different lenders by going to online financial markets such as Charvi Finservices.

What does a business loan's margin money mean?

The amount that the borrower must provide from his own funds in order to use his business loan to finance goods or services is referred to as margin money in this context. The loan funds are used to cover the remaining expenses.

For illustration purposes, let us say that a borrower wants to use a business loan to finance the acquisition of equipment for Rs. 10 lakh, and the lender requests a 25% margin. In this instance, the bank would lend the borrower Rs 7.5 lakh to buy the equipment; the remaining Rs 2.5 lakh must be paid for by the borrower independently.

What is the minimal credit score needed to submit a business loan application?

The minimal credit score or credit rating needed to apply for a business loan can differ significantly between lenders. Individual candidates may have a better chance of obtaining business loans, particularly unsecured ones, if their credit score is 700 or above.

What is a loan for MSME businesses?

A Micro, Small, and Medium Enterprise (MSME) loan is a type of credit facility designed to help these businesses achieve their financial needs, including working capital requirements and business expansion.

Can I get a business loan of Rs. 2 crore?

Depending on the type of business, age of the enterprise, applicant's credit score, and other factors, you may be eligible for a Rs. 2 crore business loan.

What do business loan pre-closure and partial-prepayment fees entail?

The lender does not impose any pre-closure or partial-prepayment fees on business loans with adjustable rates. With a 12-month lock-in period, pre-closure fees for fixed rate business loans can range from 0% to 6%. Fixed rate business loans may have part-prepayment fees of up to 5%. Within the first six months following the date of loan disbursement, borrowers are not permitted to partially prepay their company loans.

How Do I Pick the Best Business Loan Repayment Tenure?

The ideal payback schedule for any business loan would be determined by the loan's repayment structure as well as the anticipated future cash flows of the enterprise.

For whom is a small business loan eligible?

Small business loans are available to partnership firms, MSMEs, independent contractors, and self-employed professionals.