Best Business Loan in India 2024

05 January 2024
8 min read
Best Business Loan in India 2024
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A fantastic concept and a significant monetary commitment are necessary for starting and operating a successful firm. Getting a business loan in India may give you the financial assistance you need to realize your goals, whether you are an aspiring entrepreneur trying to launch a new firm or an existing business owner hoping to grow your operations.

Yet, choosing the best loan option for your company's needs may be challenging, given the wide range of loan options available. 

In this blog, we wish to provide you with a full review of your options for the best business loans in India.

Understanding Business Loan

A Business Loan is a particular kind of loan that gives firms and entrepreneurs money to help them with their funding needs.

It is a type of debt financing where a lender provides a borrower with a large sum of money, which is subsequently paid back over time with interest.

Business Loans may be used for several things, including-

- Starting a new business

- Growing an existing one

- Buying inventory or equipment

- Recruiting staff

- Marketing and advertising campaigns

- Running regular business operations, etc.

Security is not necessarily required for business loans because they might be secured or unsecured. Collateral is an item that the borrower pledges as security for the loan. The lender may seize the collateral if a secured business loan in India is defaulted upon. 

To determine the borrower's creditworthiness and capacity to repay the loan, lenders may also have specific qualifying requirements for business loans, such as a minimum credit score, business age, and revenue.

Some of the Best Business Loan in India 2024

Now that you are more familiar with the idea of business loans let's have a look at the finest and top business loans that may be helpful to you if you operate a small business, are a freelancer, or are just starting-

S.No.

Best Business Loans in India List

1.

HDFC Bank Business Loan

2.

Axis Bank Business Loan

3.

ICICI Bank Business Loan

4.

Kotak Mahindra Bank Business Loan

5.

IDFC First Bank Business Loan

6.

SBI Business Loan

Factors to Consider Before Taking a Business Loan in India

Several critical elements must be considered to ensure you select the best choice for your firm when asking for a business loan.

Some crucial considerations include the following-

  • Loan Purpose

It would be best if you fully knew our financial needs before applying for a loan.

For example, is it for inventory, equipment, or other purposes, such as expansion? By understanding the loan's purpose, you decide how much money you require and what kind of loan would be most appropriate for your requirements and creditworthiness.

  • Collateral

Specific lenders like real estate or machinery may need collateral to secure the loan. Ensure you know all the collateral that will be required and whether you feel comfortable utilizing it as collateral.

  • Interest Rates and Costs

To discover the best price, shopping around and comparing offers from several lenders is vital. Various lenders offer varying interest rates and fees. Before accepting an offer, thoroughly research the interest rate, fees, and any other costs related to the loan.

  • Repayment Schedule

Verify that you are familiar with loan repayment terms, including the loan's length, payback schedule and any fines associated with early or late payments.

  • Company Cash Flow

It is critical to comprehend your company's cash flow and your plan for making loan payments. Ensure you have a clear strategy for using the loan proceeds to make money and recoup the debt.

  • The Reputation of the Lender

Before accepting a loan offer, do some research on the lender. Learn more about a lender's reputation and level of customer service, and look for reviews and ratings from previous borrowers.

Top Business Loan in India 2024: An Overview

Here is an overview of some of the top banks offering business loans with their respective business loan interest rate in India-

1) HDFC Bank Business Loan

  • Self-employed people and businesses can apply for secured and unsecured business loans from HDFC Bank.

  • Cash credit, bank guarantees, letters of credit, bill discounting, dropline overdraft facility, overdraft, pre-shipment finance, import credit, export bill collections, etc., are a few of the business lending products provided by HDFC Bank.

  • In addition, the lender offers a variety of business loan programs, such as HDFC Bank Working Capital Loans for Small Businesses and HDFC Bank Working Capital Loans for Contractors, as well as HDFC Bank Bank Business Loans for Manufacturers, HDFC Bank Business Loans for Traders, HDFC Bank Business Loans for Chartered Accountants, HDFC Bank Business Loans for Doctors, HDFC Bank Business Loan for Professionals, and HDFC Bank Term Loan.

Interest Rate

1.90% p.a. to 21.35% p.a. (rack interest rate)

Loan Amount

Up to ₹40 lakhs (up to ₹50 lakh in some locations)

2) Axis Bank Business Loan

  • Axis Bank offers business loans with interest rates starting at 11.25% p.a. for loans up to Rs 10 crore and 15-year payback terms.

  • Business loans from ₹50,000 to ₹50 lakhs are available from Axis Bank at interest rates based on your company's profile, loan amount, financial situation, loan period, and previous credit history.

  • Bills of exchange and letters of credit are also available from Axis Bank. Axis Bank offers a collateral-free, EMI-based loan to a business entity for the current firm's development and growth.

  • The processing fee varies from 1.25% to 1.50% of the sanctioned loan amount and is based on several variables. If an instalment is missed, the borrower must pay an extra 2% p.a. in interest.

Interest Rate

11.50% to 20%

Loan Amount

₹50,000 to ₹50 lakh

3) ICICI Bank Business Loan

  • With interest rates as high as 17% p.a. and payback terms of up to 7 years, ICICI Bank provides secured and unsecured bank loan for business.

  • The bank gives business loans to new entities, enterprises without audited financials, importers and exporters, etc.

  • You will receive the essential financial help from an ICICI Bank Business Loan to launch your company ambition.

  • To serve the needs of the commercial sector, ICICI Bank offers a wide range of loan solutions. These loan packages have proven to be the foundation for several commercial buildings nationwide.

  • Several aspiring entrepreneurs have long sought ICICI Bank Business Loans to advance their dreams of entrepreneurship in this country due to their customizable business loan options, rapid processing, and hassle-free loan application procedure.

Interest Rate

For facilities with security: up to repo rate plus 6.0% (Non-PSL)

CGTMSE-backed facilities: up to repo rate plus 7.10%

Loan Amount

Up to ₹2 crores

4) Kotak Mahindra Bank Business Loan

  • To meet the needs of its applicants regarding their businesses, Kotak Mahindra Bank, one of the top business loan companies, provides business loans with terms of up to 7 years.

  • In addition, the bank offers several commercial lending solutions, including Loan Against Property, Loans for Commercial Vehicles, Healthcare Financing Solutions, Loans for Farm Equipment, and Loans for Agri Projects and Crops.

  • It provides a range of working capital business loans, such as Channel Financing, Dealer Finance, Agri SME Business Loans, Infrastructure Finance, Loans for Transportation, Logistics, Warehousing, and Loan Against Credit Card Receivables.

Interest Rate

12.99% to 14.50%

You may also want to know the Top 5 Government Business Loan Schemes in India

5) IDFC First Bank Business Loan

  • Self-employed people, salaried professionals like CAs and physicians, MSMEs, dealers, manufacturers, hospitals, and diagnostic centres can all apply for business loans from IDFC First Bank to help them with their working capital needs.

  • Additionally, it provides loans against property for all varieties of commercial, residential, and industrial properties to businesses and salaried, self-employed individuals.

  • Applicants for an IDFC First Bank business loan in India may also be eligible for a lease rental concession offset by rental revenue. Furthermore, it exports IDFC First Bank's unique Gold Card working capital loan program.

Interest Rate

10.50% p.a. onwards

Loan Amount

Based on the characteristics of the candidate

6) SBI Business Loan

  • SBI is often called the best bank for business loan in India.

  • Small company owners in manufacturing, services, and wholesale/retail trade can apply for Simple Small Business Loans (SSBL) from the State Bank of India to buy the fixed and current assets they need to expand their companies.

  • The loan amount may vary from ₹ 10 lakhs to ₹ 25 lakhs, with a maximum 5-year payback period. This loan is a dropline overdraft facility with a minimum collateral requirement of 40% and a margin requirement of 10% (in the form of stocks and receivables).

Interest Rate

According to business needs and connected to MCLR*

Loan Amount

Between ₹10 and ₹25 lakh**

Conclusion

Selecting the most suitable business loans necessitates careful examination of several variables, including interest rates, payback terms, loan amounts, eligibility requirements, and processing costs.

Before choosing a lender, do your homework and examine your alternatives since each has various loan programs and characteristics. Assessing your company's financial needs and objectives is also suggested for selecting the best loan for your company.

You May Also Be Interested to Know-

1.

Best Car Loans in India

2.

Best Personal Loan in India

3.

How to Get Personal Loan

4.

Things to Keep in Mind While Applying for a Loan

5.

How to Apply for Instant Loan

Disclaimer: This blog is solely for educational purposes. The securities/investments quoted here are not recommendatory.

To read the RA disclaimer, please click here
Research Analyst - Himanshu Sinha

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