Banks and NBFCs offer secured and unsecured business loans to finance the business or business related activities of self-employed individuals, MSME borrowers, self-employed professionals, etc. FinIndia24x7.com allows the prospective business loan borrowers to compare the features and interest rates offered by top lenders. The applicants can then apply for business loan online from the best options available based on their credit profiles.
Business loan is a credit facility offered to self-employed individuals, self-employed professionals, private companies and partnership firms, MSMEs, etc. for financing their working capital requirements, capital expenditure requirements and other business related activities.
Business Loan interest rates may vary from lender to lender depending on the credit profile of the applicant, nature of the business, loan facility availed by the applicant and the type of collateral/security pledged by the borrower.
| Bank/NBFC/Fintech | Interest Rates |
| Bajaj Finserv | 9.00% – 25% p.a. |
| HDFC Bank | 10.75% – 22.50% p.a. |
| IIFL Finance | 12.75% – 44% p.a. |
| FlexiLoans | 1% per month onwards |
| ZipLoan | 1% – 1.5% per month (Flat) |
| ICICI Bank | Up to 17% p.a. |
| Axis Bank | 10.75% p.a. |
| Indifi Finance | 1.5% per month onwards |
| Kotak Mahindra Bank | 16% p.a. onwards |
| RBL Bank | 14%-26% p.a. |
| Lendingkart Finance | 1.25% per month onwards |
| Tata Capital Finance | 12% p.a. onwards |
| NeoGrowth Finance | 15%-40% p.a. |
| Hero FinCorp | Up to 30% p.a. |
Note: Business Loan Rates are updated as of June 2024.
HDFC Bank offers secured and unsecured business loans @ 10% p.a. onwards for loan amount of up to Rs 3 crore and for tenure of up to 7 years to self-employed individuals and business enterprises.
| Interest Rate | 10% p.a. onwards |
| Loan Amount | Up to Rs 3 crore |
| Tenure | Up to 7 years |
| Processing Fee | Up to 2% of loan amount |
ICICI Bank offers both secured and unsecured business loans to importers, exporters, new entities, businesses not having audited financials, etc. ICICI business loan interest rates start from 17% p.a. onwards for tenure of up to 7 years.
| Interest Rate | Up to 17% p.a. |
| Loan Amount | Up to Rs 10 crore |
| Tenure | Up to 7 years |
| Processing Fee | Up to 2% of loan amount |
Axis Bank business loan interest rates start from 10.75% p.a. onwards for tenure of up to 15 years. Prospective business loan borrowers of Axis Bank can borrow loan amounts of up to Rs 10 crore. The bank also offers bills of exchange and Letter of Credit to its business loan applicants.
| Interest Rate | 10.75% p.a. onwards |
| Loan Amount | Up to Rs 10 crore |
| Tenure | Up to 15 years |
| Processing Fee | Up to 2% of loan amount |
Bajaj Finance offers secured and unsecured loans to its applicants for financing various business related activities like machinery purchase, business expansion, inventory restocking, renovation of office space, meeting the working capital requirements, etc. The NBFC also offers pre-approved business loans to its existing as well as new customers.
| Interest Rate | 9.75% to 30% p.a. |
| Loan Amount | Up to Rs 80 lakh |
| Tenure | Up to 12 years |
| Processing Fee | Up to 2.95% |
Individuals, groups of individuals and entities can apply for a business loan online directly through the official website of banks and NBFCs. The interest rates, loan amount, margin, collateral requirements, guarantor requirements, fees and charges, eligibility and other features of business loans vary from lender to lender.
Therefore, applicants should visit online financial marketplaces like FinIndia24x7.com to compare the interest rates, loan amount and other features offered by various lenders and opt for the lender that best suits their eligibility.
Applicants should know the following things before applying for a business loan:
Business loan lenders usually charge processing fees, prepayment charges, commitment charges, inspection charges, account service charges, penal interest and documentation charges from their business loan borrowers.
However, the fees and charges levied on business loans vary widely across lenders. Below-mentioned is an overall range of a few charges levied by the lenders on business loans.
| Particulars | Charges |
| Processing Fees | Up to 6% of the loan amount |
| Prepayment Charges | Up to 5% of the outstanding principal |
| Penal Interest | 2%-6% on the outstanding loan amount |
Below-mentioned are the features of business loans offered by various lenders:
Lenders usually set their business loan eligibility criteria based on the following factors:
Applicants usually require the following documents for processing business loan applications.
Lenders usually offer the following types of business loans:
Lenders offer Unsecured Term Loans to MSMEs to meet their business requirements, such as expansion of operations, technology upgradation and meeting the cash flow requirements, without any collateral/security
Secured Term Loans are offered against collateral like mortgage of immovable property, existing business assets of the applicant, financial securities, etc.
Unsecured Overdraft Business Loan is a collateral-free credit line facility wherein the applicant can withdraw money from their current business accounts within a predetermined limit, even with a zero balance.
Lenders offer Secured Overdraft Business Loans to their existing customers maintaining their current/savings account with the lender to finance their business operations and cash flows. The credit line facility is offered against residential/commercial/industrial property, financial securities like LIC Policies, KVP/NSC, Fixed Deposits, Mutual Funds, etc.
Professional Business Loans are offered to self-employed professionals, such as doctors/medical practitioners, architects, CA and CS. Self-employed professionals can avail this loan facility to finance their business and working capital requirements including business expansion, purchase or construction of office premises, purchase of machinery, furniture, fixtures, equipment, purchase of medicine stocks, etc.
Bill Discounting allows the businesses to receive early payments against their outstanding invoices. The borrower presents the bill drawn on his customer to the lender, which pays him immediately after deducting a certain amount as discount or commission. The lender then collects the payment in full from the borrower’s customer on the bill’s due date. In case of any delay, the borrower or the customer has to pay a predetermined interest to the bank or NBFC.
Machinery Finance is a credit facility that allows the applicants to purchase machinery and equipment for business purposes.
Lenders offer Purchase Finance to manufacturers, traders and service providers to pay for the raw materials and trading goods purchased from the suppliers.
Lenders offer Working Capital Loans to finance the day-to-day requirements of business units, such as purchase of raw materials and payment of wages.
Letter of Credit (LC) is a payment guarantee issued by the lender that enables the businesses operating in international trade to minimize their credit risk.
This loan facility is offered to small and medium enterprises engaged in online sales or having Point of Sale machines wherein the repayment is made by direct deduction of the amount against their online sales or sales made through POS machines
Personal loans can be used for meeting both personal and business requirements, business loans can be used only for financing various business related activities like raising working capital, financing business expansion, etc. While personal loans are usually unsecured in nature, business loans can be both secured and unsecured in nature.
Personal loans are offered as term loans, where repayment is EMI-based, or as an overdraft facility. However, business loans are offered in the form of term loan facility, limit-based facilities like overdraft and cash credit accounts, bill discounting, non-fund based facilities like letter of credit and bank guarantee, etc.
Loan applicants planning to avail lesser loan amounts without collateral can apply for personal loans or unsecured business loans. Those having more complex requirements and/or greater repayment flexibility should opt for respective business loan schemes based on their requirements.
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