Apply for Business Loan Online | Types, Eligibility and Interest Rates

A business loan is a financial product provided by banks, financial institutions, or online lenders to entrepreneurs and businesses to support their financial needs.

Business loans are typically used for various purposes, such as starting a new business, expanding an existing one, purchasing equipment or inventory, hiring employees, or managing cash flow.

These loans come with specific terms, interest rates, and repayment plans that borrowers agree to when they take out the loan.

Business Loans for Bad Credit

Business loans for bad credit are special types of financial help for businesses that may not have a good credit history.

When a business has a low credit score, it can be tough to get a traditional loan. However, there are lenders who understand this and offer alternative options.

These loans might have higher interest rates or different terms, but they can provide the necessary funds for businesses that need support.

Some options include short-term loans for quick cash, using invoices for financing, or even using business or personal assets as collateral. While these loans can be helpful, businesses should be cautious, as they might come with higher costs.

different types of business loans

There are various types of business loans designed to meet different financial needs of entrepreneurs and businesses. Here are some common types:

  • Term Loans

    Term loans are a type of business loan that you pay back over a fixed period, usually with regular monthly payments. Imagine you want to expand your business, buy equipment, or fund a project; a term loan can help with that. The loan comes with a set repayment plan, which means you know exactly how much you need to pay each month. These loans are beneficial for long-term investments and give businesses the financial support they need for things like growing, buying new equipment, or starting big projects.

  • Lines of Credit

    Lines of credit are like a financial safety net for businesses. It’s like having a pool of money that a business can dip into whenever they need extra funds. Imagine you have a maximum amount of money that a bank or lender says you can borrow, but you don’t have to take it all at once. You can borrow a little here and there, and you only pay interest on the amount you borrow. It’s handy for businesses to manage their cash flow, especially when they might not know exactly how much money they’ll need and when. So, a line of credit is like a flexible friend that’s there when businesses need some extra cash but don’t want to take a big loan all at once.

  • SBA Loans

    Small Business Administration (SBA) loans are like helping hands for small businesses. The SBA is like a friend that works with banks to make it easier for small businesses to get loans. So, when a small business needs money for things like starting up, expanding, or buying equipment, they can turn to an SBA loan. These loans often have better terms, lower interest rates, and longer repayment periods than regular loans. It’s like a boost for small businesses, making it a bit easier for them to get the financial support they need to grow and succeed.

  • Equipment Loans

    Equipment loans are like special tools that help businesses get the things they need to run smoothly. Let’s say a business needs a big machine, like a fancy coffee maker for a café or a computer for an office. Instead of paying for it all at once, they can get an equipment loan. It’s like borrowing money specifically to buy that machine or equipment. The machine itself acts as a kind of guarantee for the lender, making it easier for the business to get the loan. Then, the business pays back the loan in regular installments.

  • Invoice Financing

    Invoice financing is a bit like getting a quick boost for your business when you’re waiting for customers to pay their bills. Here’s how it works: if you’ve done a job for someone but they haven’t paid you yet, you can use that unpaid invoice to get some cash. It’s like going to a friend (or a company) who says, “I’ll give you most of the money from that invoice now, and when your customer pays, you give me back what you owe.” It helps businesses get the money they’ve earned a bit earlier, which can be super handy for paying bills, buying more supplies, or just keeping things running smoothly while waiting for customers to settle their debts.

  • Merchant Cash Advances

    Merchant cash advances are a bit like borrowing money with a twist for businesses that get paid with credit card sales. Imagine you run a small shop, and most of your customers pay with credit cards. When you need extra cash, a merchant cash advance is like a friend giving you a lump sum of money. Instead of paying it back with fixed monthly amounts, the lender takes a percentage from your daily credit card sales until you’ve paid back what you borrowed, plus a fee. It’s a different way to get quick cash, especially if your business deals a lot with credit cards.

  • Microloans

    Microloans are like small, friendly loans designed for people who need just a bit of money to help with their business dreams. Imagine you have a small business or a startup, and you don’t need a huge loan—just a little boost to buy equipment or cover some initial costs. Microloans are there for exactly that. They’re like the mini version of traditional loans, usually offered by special lenders or non-profit organizations. These loans have smaller amounts and simpler terms, making it easier for people with small businesses or startups to get the support they need without taking on a big financial burden.

  • Commercial Real Estate Loans

    Commercial real estate loans are like special loans for businesses that want to buy, renovate, or refinance properties where they run their business. Imagine you have a store, an office, or a factory, and you want to own the place instead of renting it. That’s where commercial real estate loans come in. It’s like borrowing money to buy or upgrade your business space. The property itself becomes a kind of guarantee for the loan, making it a bit easier to get. These loans often have longer terms, helping businesses spread out their payments over time.

  • Business Credit Cards

    Business credit cards are like special cards for businesses, similar to the ones people use for personal expenses, but these are specifically designed for business needs. Imagine you have a small business, and instead of using cash, you use a business credit card to pay for things like supplies, meals, or travel expenses. It’s like having a convenient way to manage and track business expenses. The cool part is that these cards often come with perks like rewards or cashback, giving businesses a little bonus for using them. Business credit cards help keep personal and business expenses separate, making it easier to track spending and manage finances.

  • Startup Loans

    Startup loans are like special financial boosts for people who are just starting their own businesses. Imagine you have a fantastic idea for a new business, but you need some money to get things going—this is where startup loans come in. It’s like borrowing money to help turn your business dreams into reality. These loans are designed for new businesses that may not have a long track record or a lot of financial history. With a startup loan, you get the cash you need to cover initial expenses, like buying equipment, setting up a workspace, or marketing your new venture. It’s like having a supportive friend who believes in your business idea and wants to help you get started on your entrepreneurial journey.

  • Secured and Unsecured Loans

    Secured loans are like borrowing money with a promise, using something valuable like a car or property as assurance. If you can’t pay back, the lender can take that valuable thing. Unsecured loans, on the other hand, don’t need any specific promise item. They’re based on trust and your financial history. Secured loans have a backup plan, while unsecured loans depend more on your credit reliability. Choosing between them is like deciding if you want to offer something valuable as assurance or go with a loan based on your credit record.

  • Franchise Loans

    Franchise loans are like special financial support for people who want to open a franchise of a well-known business. Imagine you love a particular brand and dream of running your own store or restaurant under that brand name. Franchise loans help turn that dream into reality. It’s like borrowing money to buy the rights and resources needed to open a franchise. These loans are tailored for people who want to be part of a recognized brand and follow a proven business model.

business loan schemes

Which loan is best for business?

Among the various types of business loans, the choice depends on the specific needs and circumstances of the business. For businesses looking to establish or expand, a term loan could be the most suitable option.

Term loans are well-suited for established businesses seeking funds for significant investments, such as expansions or equipment purchases.

These loans come with fixed repayment terms, providing businesses with a clear structure for managing their finances. The decision to opt for a term loan should be based on a careful evaluation of the business’s financial situation and the purpose for which the funds are required.

business loan by government

The Indian government has various schemes and initiatives to provide financial support to businesses through loans. These initiatives are often part of broader government programs aimed at promoting entrepreneurship, economic growth, and job creation.

  1. Pradhan Mantri Mudra Yojana (PMMY): This scheme provides loans to micro and small enterprises. It is categorized into three stages – Shishu, Kishor, and Tarun – based on the business’s stage of development.
  2. Credit Guarantee Fund Scheme for Micro and Small Enterprises (CGTMSE): This scheme facilitates collateral-free credit for micro and small enterprises by providing a credit guarantee cover to banks and financial institutions.
  3. Stand-Up India Scheme: Aimed at promoting entrepreneurship among women and Scheduled Caste (SC) or Scheduled Tribe (ST) communities, this scheme offers bank loans to set up greenfield enterprises in the manufacturing, services, or trading sectors.
  4. SIDBI Make in India Soft Loan Fund for Micro, Small, and Medium Enterprises (SMILE): This initiative by SIDBI provides soft loans to MSMEs for modernization, technology upgradation, and expansion.
  5. National Small Industries Corporation (NSIC) Subsidy Schemes: NSIC offers various schemes with financial assistance and support to small-scale industries.

Before applying for any government business loan, it is advisable to thoroughly review the eligibility criteria, terms, and conditions of the specific scheme.

Eligibility

  • Business Type: Sole proprietorship, partnership, private limited company, or other legal entities.
  • Business Vintage: Typically operational for a minimum period (e.g., 1-3 years).
  • Credit Score: A good credit history often enhances eligibility.
  • Annual Turnover: Minimum and maximum turnover criteria may apply.
  • Profitability: A track record of profitability is favorable.
  • Industry Type: Some sectors may be prioritized or restricted.
  • Loan Purpose: Clearly defined purpose for the loan.
  • Collateral: Secured loans may require assets as collateral.
  • Documentation: Complete and accurate financial documents.
  • Compliance: Adherence to statutory and regulatory requirements.
  • Repayment Capacity: Ability to repay the loan, assessed through financial statements.
  • Creditworthiness: Overall financial health and reliability of the business.

NameLoan AmountInterest Rate(p.a)
Axis Bank30000015.5% onwards12 – 36
Bajaj Finserv30000018% onwards12 – 48
Capital First Prime10000021% onwards12 – 36
Fullerton Finance10000017% onwards12 – 48
HDB Financial Services Ltd.7500018% onwards12 – 60
HDFC Bank10000013% onwards6 – 48
Hero FinCorp30000018% onwards12 – 36
ICICI Bank10000013% onwards6 – 48
IIFL Finance10000018% onwards12 – 36
Indifi Finance5000018% onwards12 – 36
Kotak Mahindra Bank50000016% onwards6 – 48
Lendingkart Finance5000018% onwards3 – 36
NeoGrowth Finance20000021% onwards6 – 24
PaySense Services India Pvt. Ltd.500018% onwards3 – 36
RBL Bank25000018% onwards12 – 36
Tata Capital Finance10000018% onwards12 – 36
ZipLoan10000018% onwards6 – 24
Allahabad Bank09.20% onwards
Andhra Bank010.80% onwards
Axis Bank5000012% onwards
Bajaj Finserv012.99% onwards
Bank of Baroda5000010.25% onwards
Bank of India09.35% onwards
Bank of Maharashtra010.85% onwards
CASHe900033% to 36%
Central Bank08.45% onwards
Citibank100009.99% onwards
Early Salary800024% onwards
Federal Bank011.49% onwards
Fullerton India011.99% onwards
HDFC Bank5000010.75% onwards
Home Credit2500024% onwards
HSBC Bank010.50% onwards
ICICI Bank5000011.25% onwards
IDBI Bank2500012% onwards
IDFC First10000010.75% onwards
Indiabulls100013.99% onwards
Indian Bank09.20% onwards
Indian Overseas Bank010.30% onwards
IndusInd Bank5000011% onwards
Kotak Mahindra Bank5000010.75 onwards
Kreditbee10001.02% p.m. onwards
Moneytap30001.25% p.m. onwards
Moneyview100001.33% p.m. onwards
Muthoot Finance015% onwards
Punjab National Bank250008.95% onwards
RBL Bank10000014% onwards
Standard Chartered Bank10000011.00% onwards
State Bank of India09.60% onwards
TATA Capital7500010.99% onwards
UCO Bank09.75% onwards
Union Bank of India08.90% onwards
Yes Bank10000010.75% onwards
Axis Bank015.20%
Axis Bank40000014.70%
Axis Bank75000013.70%
Bank of Baroda08.50% onwards
Canara Bank06.60%
Canara Bank010.40%
Canara Bank40000010.40%
Canara Bank75000010.20%
Canara Bank09.90%
HDFC Bank09.00%
HDFC Bank013.86%
HDFC Bank011.57%
Kotak Mahindra Bank011.5% to 24%
Punjab National Bank08.55% onwards
Punjab National Bank010.30% onwards
Punjab National Bank08.45% onwards
Punjab National Bank08.55% onwards
Punjab National Bank010.45%
State Bank of India010.25%
State Bank of India75000010.50%
Avanse010% to 16.50%
Credila011.85% onwards
CitiBank8.80% onwards
Syndicate Bank11.50% onwards
HDFC Ltd.9.50% onwards
State Bank of India9.60% onwards
Kotak Mahindra Bank9.60% onwards
ICICI Bank9.80% onwards
IDBI Bank10.10% onwards
Bajaj Finserv10.10% onwards
PNB Housing Finance Ltd.10.25% onwards
Tata Capital10.50% onwards
LIC Housing Finance Ltd.11.30% onwards
Axis Bank11.35% onwards
PaySense18% to 36% p.a.
Rupeelend30% for 30 days
CASHe1.75% onwards for 15-day loan
CASHe3.25% onwards for 30-day loan
CASHe2.75% onwards (monthly) for 90-day loan
CASHe2.50% per month for 180-day loan
Money View1.33% – 2% p.m.
Credy1% – 1.5% p.m.
EarlySalary2.5% p.m.
LazyPay15% – 32% p.a.
mPokketBased on lender’s terms
MoneyinMinutes0.1% – 0.7% per day
QuickCredit1% per day
FlexSalaryUp to 3% per month

How to apply business loan?

  • Explore online lenders, banks, and financial institutions.
  • Compare interest rates, terms, and customer reviews.
  • Review eligibility criteria on the lender’s website.
  • Ensure your business meets the required conditions.
  • Gather necessary documents, including financial statements, business plans, and legal papers.
  • Scan or digitize these documents for online submission.
  • Visit the lender’s website and create an account if required.
  • Provide necessary business and personal information.
  • Complete the online application form.
  • Input accurate details about your business, financials, and loan requirements.
  • Upload the scanned or digitized documents as per the lender’s requirements.
  • Ensure all required information is provided.
  • Review the application for accuracy.
  • Submit the application and documents through the online portal.
  • Allow time for the lender to review your application.
  • Check your email or account for updates or requests for additional information.
  • Once approved, carefully review the loan terms and conditions.
  • Understand interest rates, repayment schedules, and any associated fees.
  • If satisfied, accept the loan offer electronically.
  • Sign any necessary agreements through the online platform.
  • After acceptance, the funds will be disbursed directly to your business account.
  • Monitor your account for fund arrival.

business Loan by Banks

  • Business Loan SBI
  • Business Loan IndusInd Bank
  • Business Loan HDFC
  • Business Loan ICICI Bank
  • Business Loan Axis Bank
  • Business Loan IDFC First Bank

FAQs

What is a business loan?

A business loan is a financial product that provides funds to businesses for various purposes such as expansion, working capital, equipment purchase, or other business needs.

How can I qualify for a business loan?

Eligibility criteria vary among lenders, but typically include factors like creditworthiness, business profitability, industry type, and the purpose of the loan.

What documents are required for a business loan?

Commonly required documents include business financial statements, tax returns, business plans, identification proof, and legal business documents.

How much can I borrow for my business?

Loan amounts vary based on factors like the lender, your business’s financial health, and the purpose of the loan. Lenders often have minimum and maximum loan limits.

How long does it take to get a business loan approved?

Approval times vary. Online lenders may provide quicker decisions, while traditional banks may take longer. Preparing all necessary documents in advance can expedite the process.

Can I get a business loan with bad credit?

Some lenders offer business loans for individuals with less-than-perfect credit, but the terms may be less favorable. It’s advisable to work on improving your credit score before applying.

Can I use a business loan for any purpose?

While business loans are versatile, lenders often specify the purpose of the loan. Common uses include working capital, equipment purchase, expansion, and debt consolidation.

How do I repay a business loan?

Repayment terms vary. Typically, businesses make regular payments, either monthly or according to the agreed schedule. Automatic payments can be set up for convenience.

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These Interest rates are subject to change. It is advisable to check the latest rates below before applying for a Business loan with a particular lender or banks.

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Disclaimer

Display of any trademarks, tradenames, logos and other subject matters of intellectual property belong to their respective intellectual property owners. Display of such IP along with the related product information does not imply Myworldstuffs partnership with the owner of the Intellectual Property or issuer/manufacturer of such products.

Disclaimer

The information provided in this article only for informational purposes. We strive to deliver accurate and up-to-date content, but please note that Some terms, offers, and regulations may change over time.