A Business Loan is a financial solution designed to meet a wide range of business-related expenses, including working capital needs, business expansion, equipment purchase, inventory management, and cash flow support. Offered by leading banks and NBFCs, business loans provide quick access to funds with minimal documentation.
Business loans can be availed in multiple formats such as term loans (lump sum), overdraft (OD), cash credit (CC), or demand overdraft (DOD), allowing businesses to choose the most suitable financing structure based on their operational requirements.
The fees and charges for Business loans may vary based on the lender, loan amount, credit profile, and business type. Below is an indicative overview of common charges associated with business and working capital loans:
Loan Processing Fee: Typically 0.5% to 4% of the loan amount
Loan Cancellation Charges: Usually ₹3,000 to 5% of the loan amount
Stamp Duty Charges: As per state laws and loan value
Legal & Documentation Fees: Charged as per actuals, if applicable
Penal Charges: Around 2% per month on overdue payments
EMI / Cheque Bounce Charges: Approximately ₹499 to ₹599 per instance
Note: Charges may differ across banks and NBFCs.
To qualify for a Business Loan, applicants must meet the following eligibility requirements:
Age Criteria:
Minimum 21 years at loan application and maximum 65 years at loan maturity
Nationality: Indian citizens only
Credit Score: 700 or above (preferred by most banks and NBFCs)
Business Vintage: Minimum 1 year or more
Business Experience: Minimum 1 year, with the business location remaining unchanged
Annual Turnover: As defined by the respective bank or NBFC
Cash Flow: Stable and sufficient business cash flow to service loan repayments
Individuals & MSMEs
Sole Proprietorships
Partnership Firms
Private & Public Limited Companies
Limited Liability Partnerships (LLPs)
Retailers, Traders, Manufacturers
Service, Trading, and Manufacturing businesses (non-farm sector only)
Applicants must own at least one of the following:
Residence, Office, Shop, or Godown
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