Business Loan

Public Banks Business Loan (updated on 19 Jul 2018)

BankInterest RateTenureExplore
Allahabad Bank8.45% to 15.40%Maximum 7 years Explore
Andhra BankPlease contact bank branchMaximum 7 years Explore
Bank Of Baroda9.50% to 11.50%Maximum 15 Years Explore
Bank Of India10.20% to 12.95%Maximum 5 years Explore
Bank Of MaharashtraPlease contact bank branchMaximum 10 Years Explore
Canara Bank9.85% to 10.60%Maximum 10 Years Explore
Canara Bank9.85% to 10.60%Maximum 10 Years Explore
Central Bank Of India13.25%Maximum 5 years Explore
Corporation Bank10.10% to 11.60%Maximum 7 years Explore
Dena BankPlease contact bank branchMaximum 5 years Explore
Idbi Bank13% to 15%Maximum 5 years Explore
Indian BankPlease contact bank branchMaximum 5 years Explore
Indian Overseas Bank11.20% to 12.20%Maximum 5 years Explore
Oriental Bank Of CommercePlease contact bank branchMaximum 7 years Explore
Punjab And Sind Bank10.65% to 10.90%Maximum 5 years Explore
Punjab National Bank12.60% to 15.60%Maximum 7 years Explore
State Bank Of India11% to 16.65%Maximum 5 years Explore
Syndicate Bank8.95% to 12.45%Maximum 10 Years Explore
Uco Bank10.70% to 13.20%Maximum 5 years Explore
Union Bank Of India10.10% to 13.85%Maximum 5 years Explore
United Bank Of India13.15%Maximum 5 years Explore
Vijaya Bank11.25%Maximum 10 Years Explore

Private Banks Business Loan (updated on 19 Jul 2018)

BankInterest RateTenureExplore
Axis Bank14.25% to 20.00%Max. 3 Years Explore
Bandhan Bank Limited12.55% to 16%Max. 7 Years Explore
City Union Bank Limited12.50% to 13.50%Max. 5 Years Explore
Dcb Bank LimitedPlease contact bank branch.Max. 15 Years Explore
Dhanalakshmi Bank11.43% to 13.90%Max. 5 Years Explore
Federal Bank12.10% to 13.60%Max. 10 Years Explore
Hdfc Bank15.50% to 18.30%Max. 4 Years Explore
Icici Bank LimitedPlease contact bank branch.Max. 7 Years Explore
Idfc Bank LimitedPlease contact bank branch.Max. 5 Years Explore
Indusind Bank12% to 23%Max. 5 Years Explore
Jammu And Kashmir Bank Limited12.05% to 12.55%Max. 10 Years Explore
Karnataka Bank Limited12% to 13%Max. 5 Years Explore
Karur Vysya Bank11.85%Max. 7 Years Explore
Kotak Mahindra Bank Limited17% to 18%Min. 3 Years Explore
Laxmi Vilas Bank9.90% to 10.15%Max. 3 Years Explore
Rbl Bank Limited10.65% to 16.25%Max. 3 Years Explore
South Indian Bank10.60% to 12.10%Contact Bank Branch Explore
Tamilnad Mercantile Bank Limited9.65% to 12.20%Contact Bank Branch Explore
The Nainital Bank LimitedPlease contact bank branch.Contact Bank Branch Explore
Yes BankPlease contact bank branch.Contact Bank Branch Explore

Gramin Banks Business Loan (updated on 19 Jul 2018)

BankInterest RateTenureExplore
Assam Gramin Vikash Bank13.45%Maximum 5 years Explore
Bangiya Gramin Vikash Bank9.75% - 11.50%Maximum 5 years Explore
Baroda Gujarat Gramin Bank10.10% - 11.10%Maximum 5 years Explore
Baroda Rajasthan Kshetriya Gramin Bank11% - 11.50%Maximum 7 years Explore
Bihar Gramin Bank11.20% - 12.20%Maximum 5 years Explore
Chhattisgarh Rajya Gramin Bank11.75% - 12.00%Maximum 1 year Explore
Dena Gujarat Gramin Bank12.00% - 13.00%Maximum 5 years Explore
Jammu And Kashmir Grameen Bank12.00% - 12.50%Maximum 5 years Explore
Jharkhand Gramin Bank13.50% - 14.50%Maximum 7 years Explore
Karnataka Vikas Grameena Bank11.50% - 12.00%Maximum 5 years Explore
Kashi Gomti Samyut Gramin Bank10.00% - 12.75%Maximum 5 years Explore
Kaveri Grameena Bank12.00% - 14.00%Maximum 5 years Explore
Kerala Gramin Bank10.50% - 11.50%Maximum 5 years Explore
Madhya Bihar Gramin Bank12.00%Maximum 5 years Explore
Madhyanchal Gramin Bank13.00% - 13.50%Maximum 5 years Explore
Manipur Rural Bank13.00% - 15.00%Maximum 5 years Explore
Meghalaya Rural Bank11.00% - 13.50%Maximum 7 years Explore
Mizoram Rural Bank13.00% - 13.75%Maximum 5 years Explore
Narmada Jhabua Gramin Bank9.70% - 14.50%Maximum 5 years Explore
Paschim Banga Gramin Bank12.70% - 14.20%Maximum 5 years Explore
Prathama Bank11.00% - 12.50%Maximum 5 years Explore
Punjab Gramin Bank11.50% - 12.00%Maximum 5 years Explore
Rajasthan Marudhara Gramin Bank11.50%Maximum 5 years Explore
Sarva Haryana Gramin Bank11.50% - 12.00%Maximum 5 years Explore
Saurashtra Gramin Bank13.25%Maximum 5 years Explore
Sutlej Kshetriya Gramin Bank10.50% - 11.00%Maximum 5 years Explore
Telangana Grameena Bank12.50%Maximum 5 years Explore
Utkal Grameen Bank13.50% - 14.50%Maximum 5 years Explore
Uttar Banga Kshetriya Gramin Bank13.00%Maximum 5 years Explore
Uttar Bihar Gramin Bank11.50% - 12.00%Maximum 5 years Explore
Vidharbha Konkan Gramin Bank13.50% - 15.00%Maximum 5 years Explore

Business Loan

Whether you have a running business or you are starting a business, you need to have enough amount of capital so that the business can run smoothly and the things can be done in a hassle free manner. You may require a Business Loan for running your business easily.

Indian Government has already come up with variety of business loan schemes and various programs to encourage entrepreneurs to start new business as the growth of business ultimately contributes a lot to the growth of economy. Under this, many types of different schemes are offered by public sector banks to give these types of business loans to small and medium enterprises (SMEs) such as Credit Guarantee Fund Scheme for Micro and Small Enterprises, Market Development Assistance Scheme for MSMEs, Mini Tool Room and Training Centre Scheme, Credit Link Capital Subsidy Scheme for Technology Upgradation, etc.

What is a Business Loan?

A Business Loan is a loan which is specifically extended for business purposes. It may be obtained from a bank and can be either secured or unsecured. For secured loans, banks will require collateral as a security for that loan. Hence, the borrower pledges an asset such as plant, equipment, stock or vehicles for availing a secured loan which may be used, if loan is not repaid by the borrower in due course. Unsecured Loan is not backed by any security though the bank (lender) will have a general claim on the borrower's assets, in case repayment is not made by the borrower in time.

Business Loan is a borrowed capital and the business needs to pay a regular interest and repay the whole principal at the end of the loan period.

Reasons of Applying for a Business Loan

  1. Start a new Business
  2. To buy Plant and Machinery for your Business
  3. Renting or buying a place for your Business
  4. To hire new people
  5. For Business Expansion
  6. Purchase of Inventories
  7. Need of Equipments for Business
  8. New Business Opportunity
  9. Working Capital Requirement
  10. Improving Services and new technology for Business
  11. To pay for salaries and wages to current employees
  12. Transfer your existing Business Loan due to lower interest rate offered by target bank

Features of Business Loan

  • Lenders charge interest on loan, which may be fixed or floating
  • Lenders generally ask for a collateral/ security against Business Loan
  • Some Banks also require a Guarantor
  • Multiple repayment options are available
  • Online Application Facility is also provided by most of the lenders
  • Banks check your loan eligibility before approval of business loan

Benefits of Business Loan

  • Quick approval is available now-a-day
  • It is obtained through a hassle-free process
  • Customer Oriented Services are provided by the banks
  • Business Loan is available on an Attractive Interest Rates
  • Banks also provide flexible Business Solutions
  • No hidden charges are involved
  • Easy documentation
  • Flexible tenure options
  • Various repayment options
  • Availability of long Repayment Period

Types of Business Loan

Business Loan- On the basis of Tenure

Broadly, Business Loan has been divided into following 2 categories:

Working Capital Business Loan: It is provided for running daily operations of a business smoothly. It is generally given for shorter term.
Term Business Loan: It is provided for the growth and expansion of business. It is comparatively for longer term.

Business Loan- On the basis of Security

Broadly, Business Loan has been divided into following 2 categories:

Secured Business Loan: This loan is backed by collateral. This loan is available at comparatively low interest rate, as the bank can sell the collateral in case of any default by the borrower. Unsecured Business Loan This loan is not backed by any collateral. This loan is available at comparatively high interest rate to the borrowers.

What Things a Bank (Lender) Can Ask Before Approving a Business Loan?

  1. Detailed Business Plan
  2. Purpose of Getting Loan
  3. Financial Details of the Business
  4. Audited financial statements for last 3 years.
  5. Copy of Income Tax Return (ITR) pertaining to a period of last 3 years.
  6. Insurance information
  7. Collateral in case of Secured Loan
  8. Shops and Establishment certificate
  9. Excise / Sales Tax registration certificate
  10. MSE registration certificate, if applicable
  11. Last one year current account statement

Which Factors Affect Eligibility for a Business Loan?

  1. Age of Business
  2. Loan Repayment Track Record
  3. Financials of your Business Entity including its Earnings
  4. Credit Score/ Credit Performance Update
  5. Debt Service ability of the Borrower
  6. Financial Ratios of the Entity
  7. Existing Relationship with the Bank
  8. Cash flows of the Business

What items does a Business Loan Application Form Cover?

The Business Loan Application Form is to be filled up and submitted to get a business loan. The form requires the details of following items:

  1. Name of the Entity
  2. Registered Address of the Entity
  3. Nature of Business
  4. Date of Incorporation of the Entity (Sole Proprietorship, Partnership Firm, Private Limited Company, Public Limited Company)
  5. Name of Proprietors/ Partners/ Promoters
  6. Credit Facilities ( for both existing and applied for)
  7. Details of Collateral/ Security (in case of Secured Loan)

Definition of Micro, Small & Medium Enterprises:

The Micro, Small and Medium Enterprises in Manufacturing and service sector are defined as under in MSMED ACT, 2006

Enterprises* Units engaged in manufacturing/ processing of Goods Units engaged in providing/rendering of Services
Micro Enterprise Investment in plant and machinery not exceeding Rs.25 lakhs. Investment in equipment not exceeding Rs.10 lakhs.
Small Enterprise Investment in plant and machinery exceeding Rs.25 lakhs but not exceeding Rs.5 Crores. Investment in equipment exceeding Rs.10 lakhs nut not exceeding Rs.2 Crores
Medium Enterprise Investment in plant and machinery exceeding Rs. 5 Crores but not exceeding Rs.10 Crores. Investment in equipment exceeding Rs. 2 Crores nut not exceeding Rs.5 Crores

Manufacturing Enterprises i.e. enterprises engaged in the manufacture or production, processing or preservations of goods with investment in Plant & Machinery as stated above.

Service Enterprises i.e. Enterprises engaged in providing or rendering services and whose investment in equipment as specified above. (Original cost excluding Land & Building and furniture, fittings and other items not directly related to the service rendered or as may be notified under the MSMED Act, 2006).

Loans for food and agro processing will be classified under Micro and Small Enterprises, provided the units satisfy investments criteria prescribed for Micro and Small Enterprises, as provided in MSMED Act, 2006.

*All individual/s, firms/ company /LLP, etc.

Upcoming Bank Holidays

2018 July 20 is a bank holiday in Nagaland due to Kharchi Puja.
2018 August 04 is a bank holiday in Nagaland due to Ker Puja.
2018 August 13 is a bank holiday in Manipur due to Patriots' Day.
2018 August 15 is a bank holiday in Andaman And Nicobar Island due to Independence Day.
2018 August 17 is a bank holiday in Daman And Diu due to Parsi New Year (Shahenshahi).
2018 August 22 is a bank holiday in Andaman And Nicobar Island due to Bakri Id (Id-ul-Zuha)/Karma Puja.

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