Looking For A Business Loan Know The Best Banks In India

Are you looking for a business loan in India but are unsure about the best banks to reach out to? Here is a table with the latest business loan offerings, interest rates, loan amount, and tenure from some of the best banks in India.

Business loan interest rates for 2022

 

A business loan can be sought for starting a new project, expanding the existing business, buying new equipment, purchasing assets, etc.

The ongoing annual business loan interest rates start around 14% onwards. Many other factors may influence the business loan interest rates offered by lenders to a specific business. Some of them include the applicant’s creditworthiness, business plan, loan amount sought, repayment capability, business experience, profits, etc.

Top business loan providers in India 2021

1. HDFC Bank business loan

Key features:

• HDFC bank offers business loans of a maximum of Rs. 40 lakhs 
• These business loans do not require any collateral, security or guarantor
• These loans are designed for entrepreneurs, proprietors, self-employed individuals, partnership firms and businesses involved in manufacturing, trading or services
• HDFC business loans offer special benefits including overdraft facility and also flexible loan tenure of a maximum of 48 months

Eligibility:

• Minimum business turnover should be Rs. 40 lakhs
• The business must have shown profit-building ability in the last two years of operations
• As per ITR, the minimum annual earnings of the business should be Rs. 1.5 lakhs
• Individuals running the business must carry a minimum experience of 5 years. 3 years of these should be specifically in the current business operations
• The minimum interest rate charged by the bank on business loans is 16% while the maximum is 21.35%

2. Kotak Bank Business Loan

Key features:

• Businesses can avail a business loan ranging from Rs. 3 lakhs to Rs. 75 lakhs
• The bank offers business loans without collateral
• If the business loan application contains all the documents as per bank mandate, the bank approves the loan within 72 hours
• Maximum repayment tenure on business loans is 48 months
• The bank charges an 18% to 23% interest rate per annum
• Business loans can be availed with minimum paperwork and low processing time

Eligibility:

• The business operations should be in existence for at least 3 years
• Minimum business turnover should be Rs. 40 lakhs
• The applicant must provide evidence of business profitability for at least 1 year
• Business loans can be availed by units that are into either manufacturing, trading or service
• Proprietors, partnership firms, private companies, LLP and trusts can avail of this loan
• Applicant’s minimum age should be 25 years and maximum 65 years

3. IDFC First Bank Business Loans

Key features:

• IDFC first bank offers business loans for equipment purchases, business upgradation and any other business needs. 
• The bank requires loan repayment in equal installments with fixed monthly intervals.
• This loan is also called the Business Instalment Loan (BIL)
• This is an unsecured loan. Therefore, it does not require any collateral or security. 
• The loan amount offered depends on the kind of business, business income, and repayment capability
• The interest rate is estimated and offered by the bank on the day of business loan processing

Eligibility:

• BIL is available for businesses and also for professionals or non-professionals
• To avail of a BIL loan from IDFC bank, the business must be in existence for at least 3 years

4. Axis Bank Business Loan

Key features:

• The maximum loan amount of Axis bank business loan is Rs. 50 lakhs 
• Since this is an unsecured loan, the bank does not require any collateral 
• Axis Bank business loans can be availed by professionals such as doctors, engineers for purchasing equipment, assets, office space, business expansion, etc.

Eligibility:

• The business or independent practice must be at least 3 years old and functional
• The business should have a minimum annual turnover of Rs. 30 lakhs 
• A business loan applicant must be a minimum of 21 years of age and a maximum of 65 years of age
• The interest rate is determined as per business profile, financial standing, credit track record, and loan tenure required
• The indicative rates on business loans range from 14% to 21%

5. ICICI Bank Business Loan

Key features:

• The bank offers an overdraft facility as part of its business loan schemes
• This business loan does not require any guarantor, collateral or security
• Business loans of up to Rs. 2 crores can be availed
• The bank ensures fast loan processing and quick disbursement on business loans
• The interest rate on business loans ranges between 16% to 22% p.a.

Eligibility:

• These business loans can be availed by partnership firms, sole proprietorships, private limited companies, micro and small enterprises, and also public limited companies

Conclusion

Business loans can be very helpful for start-ups and MSMEs that lack financial backing while starting up. These can also aid large businesses to finance their expansion plans for further growth. With a large number of business loan options in India, it is easier for businesses to avail some of the best loan terms and reasonable interest rates.

FAQs

1. Which Indian Bank is best for a business loan?

HDFC bank offers some of the best terms in business loans in India. The bank’s interest rates and other loan terms are considered attractive as compared to other business loan options in the country.

2. Which loan is best for a start-up business in India?

There are many business loan options available for start-ups in India. One of the best options is the Mudra loan which is a government loan scheme meant for businesses. 

3. Can I get an MSME loan for a new business?

MSME loans are available for self-employed professionals, entrepreneurs, micro-small and medium enterprises, proprietorship businesses, partnership companies, limited liability partnerships (LLP), etc. Thus, you can avail these for a new business.

4. How much will a bank loan a business?

Most banks in India offer loans to businesses up to 10-30% of the annual revenue of the business. 

5. Which loan interest is low in India?

Some of the low-interest loans in India are personal loans offered by ICICI bank with interest rates starting at 10.25%. 

6. What is the CIBIL™ score?

CIBIL™ score or credit score is assigned to individual and business credit borrowers. These scores indicate the creditworthiness of a borrower. Higher the CIBIL™ score, the better the creditworthiness.

7. Do banks give loans to start a business?

Yes, many banks offer business and personal loans for starting a business. These loans are offered at competitive rates and reasonable terms for the business to gain ground before repaying them.