Lists of the “top 10 business loans” age quickly: rates change every quarter, products are renamed and lenders merge. Instead of ranking brands, this guide sets out the ten main ways Indian businesses borrow, who offers each, and how to pick a provider. A note on us: Omozing currently lends only to salaried individuals, not to businesses, so we have no business-loan product to sell you here. This is general information, not financial advice.
Who provides business loans in India
Public sector banks
Often the lowest rates for established MSMEs, and the main channel for Mudra, CGTMSE-backed and Stand-Up India loans. Expect thorough paperwork and longer timelines.
Private sector banks
Term loans, working capital limits and business cards, with faster digital processing. They usually look for 2–3 years of vintage, filed returns and a healthy bank account.
NBFCs and fintech lenders
RBI-registered non-bank lenders, many offering unsecured loans based on bank statements, GST returns or sales data. Quicker and more flexible, usually at a higher rate.
Small finance banks and co-operative banks
Serve micro and small businesses, often in smaller towns, including loans of modest size that larger banks may not prioritise.
Loan marketplaces sit across all four, showing offers from several partner lenders. FundsTiger, our sister company, is one such marketplace for business loans; there are others. The lender named in your sanction letter should always be an RBI-regulated bank or NBFC.
10 business loan options and when each fits
| # | Option | Typical providers | Best used for |
|---|---|---|---|
| 1 | Secured term loan | Banks | Expansion, a new unit, long-life assets |
| 2 | Unsecured business loan | Private banks, NBFCs, fintechs | Short-term growth needs when you have no collateral |
| 3 | Cash credit or overdraft | Banks | Day-to-day working capital; pay interest only on what you use |
| 4 | Mudra loan (PMMY) | Banks, NBFCs, MFIs, small finance banks | Micro enterprises, up to ₹20 lakh |
| 5 | CGTMSE-backed loan | Banks and eligible NBFCs | Collateral-free credit for micro and small enterprises |
| 6 | Stand-Up India loan | Scheduled commercial banks | New ventures by SC/ST or women entrepreneurs |
| 7 | Invoice discounting / TReDS | Banks, NBFCs via RBI-authorised TReDS platforms | Unlocking cash stuck in receivables from large buyers |
| 8 | Equipment or machinery finance | Banks, NBFCs, manufacturers’ finance arms | Buying machines; the asset secures the loan |
| 9 | GST or banking-surrogate loan | NBFCs and fintechs | Businesses with strong GST filings but thin financial statements |
| 10 | Loan against property | Banks, housing finance companies, NBFCs | Larger amounts at lower rates, if you can pledge property |
For a deeper look at each type, see our guide to types of business loan, and for collateral-free borrowing specifically, unsecured business loans.
Government schemes worth knowing (as of October 2026)
- Pradhan Mantri Mudra Yojana: loans for non-farm micro enterprises in four categories: Shishu (up to ₹50,000), Kishore (₹50,000 to ₹5 lakh), Tarun (₹5 lakh to ₹10 lakh) and Tarun Plus (₹10 lakh to ₹20 lakh, for borrowers who have repaid an earlier Tarun loan).
- CGTMSE: a government trust guarantees part of the lender’s risk, so micro and small enterprises can borrow without collateral or third-party guarantees. The ceiling was raised from ₹5 crore to ₹10 crore with effect from 1 April 2025. A guarantee fee applies and is usually passed on to the borrower.
- Stand-Up India: bank loans between ₹10 lakh and ₹1 crore for greenfield enterprises set up by SC/ST or women entrepreneurs.
- Collateral-free MSE lending: RBI rules bar scheduled commercial banks from taking collateral on loans to micro and small enterprises up to ₹20 lakh, as the government confirmed in Parliament in July 2026.
Figures as of October 2026, from the Ministry of Finance (PMMY), CGTMSE and the Ministry of MSME. Scheme terms change; check mudra.org.in, cgtmse.in and standupmitra.in before acting.
What a few percentage points cost a business
Business loan rates vary far more than personal loan rates, from bank-level pricing for secured, well-documented borrowers to much higher rates for quick unsecured credit. The chart shows the interest on a ₹10 lakh, three-year loan at different rates.
Total interest on a ₹10 lakh business loan over 36 months
Illustrative. Reducing-balance EMI on ₹10,00,000 for 36 months: about ₹33,214 at 12%, ₹35,157 at 16%, ₹37,164 at 20% and ₹39,233 at 24%. Processing fees, GST and guarantee fees are not included. Not a quote from any lender.
Fast money is useful; just make sure the return on what you buy with it beats what it costs.
How to choose a business loan provider
Match the loan to the purpose
Working capital needs a revolving limit or invoice finance; a machine needs equipment finance; expansion needs a term loan. A short, expensive loan for a long-term asset strains cash flow.
Compare the APR and all fees
Processing fee, GST, documentation charges, guarantee fee and insurance. Ask for a written sanction letter and Key Fact Statement.
Check security and guarantees
Is collateral or a personal guarantee needed? Could the loan qualify under CGTMSE instead?
Know the prepayment terms
Useful if a large order pays out early. Charges vary by lender and loan type.
Look at speed honestly
Quick approval is worth something, but only if the cost difference is small compared with the opportunity.
Confirm the lender is regulated
Banks and NBFCs are regulated by the RBI. Never pay an “approval fee” upfront to an agent.
What lenders usually ask for
Your personal credit score matters, especially for small businesses and sole proprietors. See what credit score you need for a business loan and, if yours is low, 12 ways to get a business loan with a low CIBIL score.
Salaried with a side business?
If you run a small venture alongside a salaried job, lenders usually treat your salary as your main repayment capacity. In that case a personal loan based on your salary may be simpler than a business loan for a new, unproven venture. Omozing offers personal loans to salaried people with a take-home of ₹40,000+ a month and a credit score from 600, up to ₹25 lakh. A personal loan is a personal liability, so borrow only what your salary can repay even if the venture is slow to earn.
Salaried and need funds?
Omozing personal loans: up to ₹25 lakh for salaried borrowers, credit score from 600, two documents, and the full cost in your Key Fact Statement before you sign.
Frequently asked questions
Which is the best business loan provider in India?
No single provider is best for every business. Banks usually offer the lowest rates to established businesses with clean records, NBFCs and fintechs are faster and more flexible, and government schemes help micro and small businesses borrow without collateral. Compare APR, security, speed and fit.
What is the maximum Mudra loan amount?
As of October 2026, Mudra loans go up to ₹20 lakh. The Tarun Plus category, from ₹10 lakh to ₹20 lakh, is for borrowers who have successfully repaid an earlier Tarun loan.
Can I get a business loan without collateral?
Yes. Unsecured loans from banks and NBFCs, Mudra loans and CGTMSE-backed loans don’t require collateral. RBI rules also bar scheduled commercial banks from taking collateral on micro and small enterprise loans up to ₹20 lakh.
What is CGTMSE?
The Credit Guarantee Fund Trust for Micro and Small Enterprises guarantees part of a lender’s loss on eligible loans, so lenders can lend without collateral. The ceiling is ₹10 crore per borrower from 1 April 2025; a guarantee fee applies.
How long does a business loan take?
Unsecured loans from NBFCs and fintechs can be decided in days. Secured bank loans and scheme-backed loans usually take longer because of document checks and valuations.
Does Omozing give business loans?
Not at present. Omozing lends to salaried individuals. For business loans, compare banks, NBFCs and government schemes; FundsTiger, our sister company, is one marketplace that shows business loan offers.
Sources: Pradhan Mantri Mudra Yojana (mudra.org.in; Ministry of Finance, Tarun Plus from October 2024); CGTMSE (cgtmse.in) and Ministry of MSME reply in Lok Sabha, July 2026; Stand-Up India (standupmitra.in). Figures as of October 2026. This is general information, not financial advice. Check the official source before acting.
Omozing is the digital lending brand of Aparampaar Finance Private Limited, an RBI-registered non-deposit-taking NBFC. FundsTiger is our sister company. See our regulatory disclosures and grievance redressal process.