Business Loans by IDCS
At IDCS, we offer a wide range of business loans, both secured and unsecured, tailored to the needs of self-employed individuals, MSMEs, professionals, and other enterprises. Our platform allows you to compare various lenders’ offerings and choose the most suitable option based on your credit profile, ensuring that you get the best business loan to meet your financial goals.
What is a Business Loan?
A business loan is a financial facility provided to self-employed individuals, MSMEs, companies, and partnerships. It helps cover working capital, capital expenditures, and various business operations. Business loans can be secured with collateral or unsecured, depending on the borrower’s preference and financial standing.
Interest Rates on Business Loans
At IDCS, we provide access to competitive business loan interest rates that vary based on factors such as the borrower’s credit history, the nature of the business, and the type of collateral offered. Each lender may have unique conditions regarding these elements.
Business Loan Interest Rates in India – 2024
Business loan interest rates vary based on factors such as the borrower’s credit score, business profile, loan amount, and whether the loan is secured or unsecured. It is essential for businesses to compare offers from various lenders to find the most competitive interest rates.
Compare Business Loan Interest Rates from Top Banks & NBFCs
Here’s a comparison of business loan interest rates from top banks and NBFCs in India:
| Lender | Interest Rate |
|---|---|
| HDFC Bank | 10.75% – 22.50% p.a. |
| IIFL Finance | Up to 36% p.a. |
| FlexiLoans | 1% per month onwards |
| ZipLoan | 1% – 1.5% per month (Flat) |
| ICICI Bank | Up to 17% p.a. |
| Axis Bank | 17.15% p.a. onwards |
| 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: These business loan rates are effective as of October 2024. Rates are subject to change based on market conditions.
Best Business Loan Options for 2024
HDFC Bank Business Loan
HDFC Bank provides flexible business loans starting at 10.75% per annum. The loan amount can go up to Rs 3 crore, with repayment tenures stretching up to 7 years. This makes HDFC Bank a great option for both startups and established businesses looking to expand.
- Interest Rate: Starting from 10.75% p.a.
- Loan Amount: Up to Rs 3 crore
- Tenure: Up to 7 years
- Processing Fee: Up to 2% of the loan amount
ICICI Bank Business Loan
ICICI Bank offers business loans tailored to the needs of importers, exporters, and small businesses, with interest rates going up to 17% per annum. Whether you need a secured or unsecured loan, ICICI provides options with repayment terms 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 the loan amount
Axis Bank Business Loan
Axis Bank offers business loans starting at 17.15% p.a., with loan amounts going up to Rs 10 crore. With repayment tenures of up to 15 years, Axis Bank provides longer repayment flexibility for businesses. The bank also supports businesses with tools like Letters of Credit and Bills of Exchange.
- Interest Rate: From 17.15% p.a. onwards
- Loan Amount: Up to Rs 10 crore
- Tenure: Up to 15 years
- Processing Fee: Up to 2% of the loan amount
How to Apply for a Business Loan Online in 2024
Applying for a business loan online is a straightforward process. Individuals, companies, and other entities can apply directly through the official websites of banks or Non-Banking Financial Companies (NBFCs). It’s important to research and compare lenders, as business loan interest rates, collateral requirements, fees, and eligibility criteria can vary significantly.
To streamline the comparison process, platforms like idcsindia.in offer side-by-side assessments of various lenders, allowing you to select the best business loan that matches your needs.
Fees and Charges Associated with Business Loans
Business loans typically come with a variety of charges, including processing fees, prepayment penalties, and account service fees. These fees differ from lender to lender, so it’s crucial to understand them before applying. Below is a general overview of some common charges:
| Charge | Fee |
|---|---|
| Processing Fee | Up to 6% of the loan amount |
| Prepayment Charges | Up to 5% of the outstanding principal |
| Penal Interest | 2% to 6% on the outstanding loan amount |
Features and Benefits of Business Loans
Here are some key features of business loans that borrowers can benefit from:
- Secured and Unsecured Options: Most lenders offer both types, allowing borrowers to choose based on their needs and available collateral.
- Variable Interest Rates: Rates depend on the borrower’s credit score, type of loan, and nature of collateral, if applicable.
- Top-Up Loans: Many lenders allow existing borrowers to take additional loans over and above their current business loan.
- Overdraft Facility: Some lenders offer overdraft protection to business loan borrowers, providing extra flexibility.
- Quick Online Application: Online applications can result in faster approval times, minimal documentation, and swift loan disbursement.
- Special Rates for Women Entrepreneurs: Many lenders offer concessional interest rates to women-owned businesses.
Eligibility Criteria for Business Loans
Lenders typically have specific eligibility criteria for business loans, including:
- Age: Applicants must be between 21 and 65 years (varies by lender).
- Business Vintage: Minimum of 3 years in operation (some lenders require 5 years).
- Turnover: Ranges from Rs 90,000 to Rs 250 crore or more, depending on the lender.
- Credit Score: A score of 750 or above is generally required, though some lenders may consider lower scores.
- Income: Minimum income starting from Rs 1 lakh per annum.
Eligible applicants include MSMEs, partnerships, sole proprietors, private/public limited companies, and self-employed professionals (e.g., doctors, CA, CS).
Required Documents for a Business Loan
Lenders typically ask for the following documents when processing a business loan application:
- ID Proof: Voter ID, Aadhar, Passport, etc.
- PAN Card: For both individuals and businesses.
- Address Proof: Utility bills, lease agreements, or bank statements.
- Business Proof: Continuity proof, GST returns, and company registration documents.
- Financial Documents: Last two years’ ITR, balance sheet, P&L statement certified by a CA, and bank statements for the last 6 months.
Types of Business Loans Available
Various business loan options cater to different business needs:
- Unsecured Term Loans: Offered without collateral, these loans are ideal for business expansion, equipment upgrades, or addressing cash flow issues.
- Secured Term Loans: These loans are backed by assets such as property or financial securities.
- Unsecured Overdraft Loans: A credit line without collateral, allowing businesses to withdraw funds from a current account even with a zero balance.
- Secured Overdraft Loans: Collateral-backed credit line for businesses, usually secured by real estate or financial assets.
- Professional Business Loans: Targeted towards self-employed professionals like doctors, architects, or CAs, allowing them to finance office setup or business expansion.
- Bill Discounting: Enables businesses to receive early payments for outstanding invoices by offering the bill to the lender, who collects the payment later.
- Machinery Finance: Specialized loans for purchasing machinery and equipment.
- Purchase Financing: Helps manufacturers, traders, and service providers finance the purchase of raw materials and goods.
- Working Capital Loans: Designed to cover the day-to-day operating expenses like wages and inventory.
- Letter of Credit (LC): A payment guarantee issued by the lender, useful for businesses involved in international trade.
- Merchant Cash Advance: Available to businesses using POS machines, repaid directly through a percentage of daily sales.
5 Key Things to Know Before Applying for a Business Loan
Before applying for a business loan, consider these essential factors:
Interest Rates: Interest rates vary across lenders. Compare multiple options to find the lowest rate, helping reduce the overall cost of the loan.
Turnaround Time: The time for approval and disbursement varies. Quick disbursement may be a deciding factor depending on your urgency. This also depends on the loan type and collateral involved.
Credit Score: A credit score of 700 or above increases your chances of approval and might even secure you a lower interest rate.
Processing Fees: Check the lender’s processing charges and other fees before applying, as these can impact the total loan cost.
Collateral Requirements: Many lenders require collateral, such as stocks, property, or equipment. Knowing what collateral is needed can help you prepare.
By understanding these factors, you can make informed decisions and enhance your chances of securing the best possible business loan.