Best Banks for Business Loans in India

Capital support requires at different stages of the business life cycle. Banks provide the most reliable and trustworthy source for funding your start-up need, expansion, and extension needs. Business loans give the most required cash flow for the operation and management of the entity.

There are hundreds of small and big financial institutions that lend loans in India for business. To ease the browsing the best one out of the lot, we will discuss five leading banks in India that offer business loans suitable to meet your fund crunch.

1) HDFC Business Growth Loans

HDFC, a leading private sector bank in India, provides business loans up to forty-lakhs INR. The loans are collateral-free, without a guarantor, and you do not have to pledge any security for the loan approval. In selected areas, borrowers can apply for up to fifty lakhs INR.

HDFC Bank also offers an overdraft facility and flexible repayment tenure up to forty-eight months. Interest rates of the loan vary between 11.90 per cent per annum to 21.35 per cent per annum. Bank decides on the interest rate based on your profile, business position, creditworthiness, CIBIL score, and other factors.

Eligibility

• Self-employed individuals/Freelancers, partnership entities, proprietors, businesses involved in trading, manufacturing, services, etc., can apply for the HDFC business loans.

• Business should be profitable in last two-years

• Minimum turnover should be forty-lakhs INR

• The company or Self-employed individual must have a minimum annual income of 1.5 lakhs INR according to the filed ITR.

• The business owner must have five years’ experience in business/trade with three years in current business/trade.

2) SBI Simplified Small Business Loans

Small businesses often find it tough to get business loans because of multiple reasons such as less approved amount than required, lack of collateral, absence of a detailed business plan, irregular financial history, etc. 

To bridge this demand and supply divide, the State Bank of India provides a facility curated for the MSME sector. If you are a startup or a small business, apply for SBI Simplified Small Business Loan to build your fixed and current assets without worrying about the fund support.

SBI offers a minimum of ten lakhs INR and a maximum twenty-five lakhs INR loan amount in this financial product. SBI Simplified Small Business loan interest is linked to MCLR (Marginal Cost of Funds based Lending Rates), and you need to pay 40 per cent of the loan amount as collateral.

Eligibility

• The borrower must have a current account in any bank of at least two-years

• The applicant/business must have a one lakh INR monthly balance in the account

• Businesses should have an existence of a minimum of five years.

The interest rates for SBI Simplified Small Business Loans varies from 6.70 per cent per annum to 7.50 per cent per annum. You can avail of loan repayment tenure of up to sixty months and a drop line overdraft facility.

3) IDFC First Bank Business Loans

IDFC offers business loans for multiple requirements such as business extension, equipment purchase, and any other fund support you need in the business life-cycle. The bank terms their business loan as Business Instalment Loans (BIL). It means you have to repay the loan amount in equal instalments with scheduled monthly intervals.

Key Features and Eligibility

• IDFC business loan is an unsecured business loan for professionals, businesses, and self-employed/freelancers. It is the best option for people who lacks security and collateral.

• You can apply for a business loan of up to one crore INR and a quick business loan of up to fifty lakhs INR

• IDFC also offers top-up and balance transfer facilities with the business loan

• Loan tenure is available for up to forty-eight months with an interest rate that starts from 14.5 per cent per annum. They also provide fifty per cent off on business loan processing fees (terms & conditions applied).

• Business must have minimum existence of five years with all the documents and ITR certificates.

4) CITI Bank Business Loans

Citi Business India provides a range of business loans with attractive features and a hassle-free process. You can apply online and offline for various MSME loans such as Overdrafts, Working Capital Loans, Import & Export loans, and Short & Long-Term Loans. Citi Bank offers customised business-specific loans that fulfil your fund requirement to meet business life-cycle requirements.

Key Features & Eligibility

• Proprietors, Partnership firms, Private Ltd. entities and self-employed individuals can apply for the Citi Bank business loans.

• The applicant must be doing business for at least three years and between 21 to 65 years of age.

• The maximum loan amount is thirty lakhs INR with a loan tenure of up to sixty months.

• Interest rates vary between 12 to 18 per cent per annum, depending upon your profile, CIBIL score, income sources etc.

Applicable charges

• Loan Processing Charges: Up to 2 per cent of the loan amount

• No Pre-payment charges until 12 EMIs, 3 to 4 per cent penalty afterwards on the balance loan amount

• EMIs delay charges: 2 to 3 per cent per month applicable on EMI/Principal Loan Amount Overdue

AXIS Bank Business Loans

AXIS Bank offers convenient business loan services to professionals like CA, Doctors and businesses. The loans are collateral-free, and you can avail up to fifty lakhs INR for business se-up, expansion, equipment purchase, and any other business-specific requirement.

Key Features and Eligibility

• Businesses should have the existence of at least three years and be in good shape financially.

• The minimum turnover requirement is thirty lakhs annually.

• The applicant should be a minimum of 21 years and a maximum of 65 years of age.

• Instant credit facility for pre-qualified customers of the Axis Bank

• The loan tenure ranges from six to thirty-six months with a flexible repayment feature.

• Axis Bank business loans interest rates start from nine per cent per annum. Bank decides interest rates after your profile assessment and varies case to case basis.

Business loans are the most reliable source to meet the financial requirements to take your business to the next step or maintain healthy cash flow. Read the passage, browse the internet, compare business loan specifications on websites such as Andromeda, and select the best business loan for your requirements. All the above-given banks offer an online option for a business loan application, so apply at your convenience and get the loan disbursed quicker and faster.