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June 25, 2021

How to apply business loan & interest rate, MSME Loan for New Business

Business Loans

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Check your Eligibility!

Individuals who wish to expand their business or fund a business idea can opt for a business loan offered by a number of reputed financial lenders. Typically, most financial lenders offer business loans up to Rs.75 lakh for the purpose of business expansion with repayment tenures stretching to 60 months.

Small Business Loans details

Interest Rate11.90% p.a. – 30% p.a.
Loan amountRs.50,000 – Rs.75 lakh
Repayment TenureUp to 60 months

Small Business loans offered by financial Banks

Listed below are several financial lenders offering business loans and the key details of the small business loans:

Financial BankInterest RateLoan AmountLoan Tenure
HDFC Bank11.90% p.a. – 21.35% p.aUp to Rs.50 lakh12 months – 48 months
Capital Float15% p.a. – 24% p.a.Rs.5 lakh – Rs.50 lakh12 months – 36 months
Capital FirstAs per the terms and conditions set by Capital FirstRs.3 lakh – Rs.75 lakh12 months – 60 months
RBL BankAs per the terms and conditions set by RBL BankUp to Rs.10 lakh12 months – 60 months
IIFL Finance16% p.a. – 30% p.a.Up to Rs.50 lakh12 months – 36 months
Bank of BarodaAs per the terms and conditions set by Bank of BarodaUp to Rs.5 lakhAs per the terms and conditions set by Bank of Baroda
Axis BankAs per the terms and conditions set by Axis BankRs.50,000 – Rs.50 lakhAs per the terms and conditions set by Axis Bank

*The personal loan interest rate will be set based on the income and work experience of the applicant and his/her ability to repay the loan.

 

HDFC Bank Small Busines Loan

Listed below are the key highlights of the HDFC Bank Small Business Loan:

  • Loan amount up to Rs.40 lakh generally and Rs.50 lakh in select areas.
  • Processing fee for the loan up to 2.5% of the loan amount.
  • Overdraft facility up to Rs.15 lakh.
  • No requirement for a guarantor or collateral.
  • Added bonus of a free life insurance policy.
Financial BankProcessing feePre-payment chargesPenal interest
HDFC BankUp 2.5% of the loan amountUp to 4% of the outstanding balance2% per month of the due amount

Capital Float Small Business Loan

Listed below are the key details of the Capital Float Business Loan:

  • Attractive interest rate for loans up to Rs.50 lakh.
  • Flexible repayment tenures up to 36 months.
  • No hidden costs
  • Loan amount disbursal within 2-3 working days following approval.
  • Online application process.
Financial BankProcessing feePre-payment chargesPenal interest
Capital FloatUp 2% of the loan amountAs per the terms and conditions set by the lenderAs per the terms and conditions set by the lender

Capital First Small Business Loan

Listed below are the key details of the Capital First Small Business Loan:

  • Attractive interest rates offered on loans up to Rs.75 lakh.
  • Flexible tenures between 1 – 5 years.
  • Online application and door-step banking services.
  • Top-up facility available.
  • Minimum documentation.

RBL Bank Small Business Loan

Listed below are the key details of the RBL Small Business Loan:

  • Flexible loan tenures up to 60 months.
  • Choice of secured and unsecured business loans.
  • Quick and hassle-free documentation process.
  • Attractive interest rates for loans up to Rs.10 lakh.
  • Residential or commercial properties can be used as collateral.

Bank of Baroda Small Business Loan

Listed below are the key highlights of the Bank of Baroda Small Business Loan:

  • Loans up to Rs.5 lakh.
  • Flexible repayment tenures on offer.
  • No requirement for collateral.
  • Minimum documentation.
  • Quick loan processing.

Axis Bank Small Business Loan

Listed below are the key highlights of the Axis Bank Small Business Loan:

  • Collateral-free loans.
  • Loans up to Rs.50 lakh at attractive interest rates.
  • Option of balance transfer from another financial lender.
  • Online application process.
  • Minimum documentation.

Eligibility for Small Business Loan

Listed below are the general conditions for eligibility for a Small Business Loan set by financial lenders”

  • The applicant should be a resident of India.
  • The applicant should be a self-employed individual with at least 3 years business experience.
  • Should be a minimum of 21 years.
  • Should provide proof of business turnover and IT returns of the last 2-3 financial years.
  • Balance sheet of the business should show profitability.

Documents Required for Small Business Loan

Listed below are the documents that Small Business loan applicants will have to submit for verification:

  • Proof of identity – Aadhaar card, Passport, Voter ID Card, etc.
  • Proof of address – Passport, Utility bill, Voter ID card, etc.
  • 6 months’ bank statements.
  • Business Income Tax Certificate, Balance sheet showing profits and loss of the last 2 years that has been certified by a Chartered Accountant.
  • Proof of business – establishment license, trade license, etc.
  • Sole proprietor deed, partnership deed, etc.
  • House property or commercial property documents – for secured business loans.

Steps to apply for a Small Business Loan

Listed below are the online and offline steps to apply for a business loan:

  • Online process:
  • If the financial lender has the online application facility, visit the website.
  • Under the loans section, choose business loans or small business loans.
  • Download the application form and fill in the required details.
  • Submit the application form.
  • Once intimated by the customer service team of the lender, submit the required for verification.
  • If eligible, the loan will be approved, and the loan amount will be disbursed within a few days.
  • Offline process:
  • Visit the branch of the financial lender and procure the business loan application.
  • Fill in the required details, attest the form and submit all the required documents.
  • The lender will then verify the submitted documents.
  • If found eligible, the bank will disburse the loan amount.

 

 

 

 

 

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