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Business Loan
Providing affordable Loans For Business.
Ever since the Startup India campaign was announced in the year 2015, the number of new Micro, Small & Medium Enterprises (MSMEs) has been on the rise. The campaign is based on an action plan aimed at promoting bank financing for Startups and new businesses.
Several leading financial institutions offer Startup loans for new businesses at low interest rates. Further let’s discuss the eligibility required to start a new enterprise, along with popular business loan schemes. It has encouraged startups, which will eventually lead to more job creation, equity and shall help in the nation’s socio-economic growth.
Eligibility Criteria for New Business (Startup) Loan
- Applicant should be minimum 21 years and maximum 65 years at the time of loan maturity
- Work Status should be self-employed
- Startup to be formed must as a sole proprietorship, partnership firm, private or public limited company, or a limited liability partnership (LLP)
- Credit score: 750 or above
- Applicant with no previous loan defaults with any bank shall be considered more
- Total annual turnover of the firm should not exceed Rs.25 crore
Comparison of Business Loan Interest Rates offered by Top Banks/NBFCs
| Bank/NBFCs | Interest Rate |
| Axis Bank | 10.75% p.a. onwards |
| Flexi loans | 1% per month onwards |
| HDB Financial Services Ltd. | 8% – 26% p.a. |
| HDFC Bank | 10.75% – 25% p.a. |
| IDFC First Bank | 10.50% p.a. onwards |
| Indifi | 1.50% per month onwards |
| Kotak Mahindra Bank | 16% – 26% p.a. |
| Lending kart | 12% – 27% p.a. |
| M capital | 2% per month onwards |
| Neo Growth Finance | 15% – 40% p.a. |
| Tata Capital | 12% p.a. onwards |
| UGRO Capital | 9% – 36% p.a. |
Documents Required
- Duly filled application form with Passport-sized photographs
- KYC documents of applicant and co-applicants that include Passport, AADHAR card, Voter’s ID card, Driving License, PAN Card and Utility Bills (Telephone & Electricity Bills)
- Last 12 months’ bank statement
- Last 1-year ITR
- Business Incorporation Certificate
- Business Address Proof
- Any other document required by the lender
Benefits of Startup Loans
- The new entrepreneurs are granted tax relief for 3 years
- Funds from venture capital are quite expensive for a startup with investors of venture capital asking for as much as 5 to 10 times the return on their investment. However, a bank loan does not require any equity dilution and the rate of return to the bank is fixed at a nominal interest rate
- Banks are easier to approach. With numerous Banks and NBFCs in India, it is simpler to approach local bankers and request for funds and credit facilities
- Banks in India have an established and well-structured framework for processing the funding request of entrepreneurs. Therefore, loan requests are usually processed quickly with minimum documentation
- Another significant benefit is that the profit (as well as the loss) of the business belongs only to the borrower. Borrowers are not answerable to the bank regarding the profit and loss of their businesses
₹ 2500000
5 Lac
2 Cr
15 Years
5
30
8.5 %
6
20
Monthly Loan EMI
₹ 0
Estimated Monthly Payment
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