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Top 10 Banks for Business Loan

Table of Contents

Business loans are designed to help small businesses and entrepreneurs meet their capital requirements. There are over 30+ banks and financial institutions in the country that offer tailor-made business loans at attractive interest rates to suit your financial requirements.

1. HDFC Business Loan

Benefits

  • Self-employed individuals, private companies, proprietors, and partnership firms that are involved in trading, manufacturing, or services can apply for this loan, subject to meeting the lender’s eligibility criteria.
  • Individuals looking to avail the loan need not submit any collateral or security. A guarantor is also not required to avail this loan.
  • Loan balance transfer facility is offered.
  • Prospective borrowers can check their eligibility online or at an HDFC Bank branch in just a few seconds.
  • Pre-payment of the loan is permitted after 6 EMIs are repaid.

*Note: For the EMI and repayment calculation, it is assumed that a loan amount of Rs.5 lakh has been availed for a 3-year term at an interest of 16% p.a.

Internal Charges

  • Overdue EMI interest: 2% per month on the overdue amount, subject to a minimum fee of Rs.200, will be applicable
  • Stamp duties: As per the laws of the state that the borrower resides in
  • Cheque swapping charges: Rs.500
  • Amortisation schedule charges: Rs.200
  • Cheque bounce charges: Rs.550 per instance
  • Legal charges: At actual

2. SBI Small Business Loan

Benefits

  • The Simplified Small Business Loan from State Bank of India is a general-purpose loan that can be availed by business owners, professionals, and self-employed individuals.
  • The total charges levied, including processing fee, inspection charges, documentation charges, remittance charges, and commitment charges, is just Rs.7,500.
  • Minimum collateral of 40% is required for this loan.
  • In addition to this loan, State Bank of India offers 15 other business loans such as the SME eBiz Loan, Stand Up India, SME Smart Score, SME Credit Card, Doctor Plus, Medical Equipment Finance, e Dealer Finance Scheme, e Vendor Finance Scheme, ABL & ABL CRE, Fleet Finance, PM Mudra Yojana, Export Packing Credit, Lease Rental Discounting, Open Term Loan, and Warehouse Receipt Finance.

*Note: For the EMI and repayment calculation, it is assumed that a loan amount of Rs.5 lakh has been availed for a 2-year term at an interest of 12% p.a.

3. Fullerton India Business Loan

Benefits

  • The lender offers four types of business loans: Business Loan, Business Loan for Women, Business Loan for Doctors, and Business Loan for Chartered Accountants. Each of these schemes has unique features and benefits.
  • Fullerton India’s Business Loan can be availed by business owners for any business funding requirements that may have risen.
  • The Business Loan for Women is a unique loan product that has specially been designed to cater to the financial needs of women entrepreneurs.
  • The Business Loan for Doctors is a loan scheme that is designed for doctors who are in need of funds to either open their own clinic or upgrade an existing clinic. You can also apply for this loan if you are looking to purchase new medical equipment, hire more staff, etc.
  • The lender’s Business Loan for Chartered Accountants is a loan scheme that can be availed by chartered accountants who require additional capital to expand their operations.
  • Applicants need not hypothecate their assets to avail this loan.
  • All loans will be disbursed in a timely manner.

*Note: For the EMI and repayment calculation, it is assumed that a loan amount of Rs.5 lakh has been availed for a 3-year term at an interest of 18% p.a.

Internal Charges

  • Collection of cash or cheque: Rs.300 per collection
  • ECS/cheque dishonour charges: Rs.30 per instance
  • Swap charges: Rs.500
  • Loan cancellation charges (if cancelled before payment of the first EMI): Rs.1000
  • Fore-closure charges: Between 3% and 4%

4.Kotak Mahindra Business Loan

Benefits

  • The lender requires minimal documentation to process this loan.
  • Flexible repayment options are offered to borrowers to suit their convenience and ease their financial burden.
  • Door-step service is offered by Kotak Mahindra Bank.
  • This loan can be availed by manufacturers, self-employed business persons, and service providers.

*Note: For the EMI and repayment calculation, it is assumed that a loan amount of Rs.5 lakh has been availed for a 3-year term at an interest of 14% p.a.

Internal Charges

  • Documentation charges: Up to a maximum of Rs.10,000 plus taxes
  • Cheque dishonour charges: Rs.750 plus taxes per instance
  • Charges for copies of documents: Rs.500 plus taxes per instance
  • Repayment mode/Account swap charges: Rs.500 plus taxes
  • Charges to obtain a duplicate NOC: Rs.500 plus taxes
  • Substitute interest: 3% per month plus taxes
  • Terminal charges: 5% or 6% of the operating limit

5. DHFL Business Loan

Benefits

  • This loan is ideal for business owners and self-employed individuals who require a large loan amount.
  • You can apply for this loan from DHFL if you wish to expand your business, upgrade your current business, or maximise growth.
  • This loan can be availed by doctors, self-employed individuals, proprietorships, limited liability partnerships, partnerships, limited companies, and private limited companies.

Internal Charges

  • CERSAI registry or modification charges: Rs.50/Rs.100 (based on the loan amount)
  • Technical fees: Up to a maximum of Rs.750
  • Part-payment charges: Up to 5% plus applicable taxes
  • Fore-closure charges: Up to 5% plus applicable taxes
  • ECS or cheque bounce charges: Rs.500 plus applicable taxes
  • Bank charges on ECS or cheque bounce: At actuals
  • Cash collection charges: 1% of the amount that is collected for payments that are of Rs.50,000 and above plus tax
  • Overdue charges: 18% p.a.
  • ECS or cheque swapping charges: Rs.250 per swap plus applicable tax
  • Foreclosure statement charges: Rs.500 plus applicable GST

6. IIFL Business Loan

Benefits

  • The lender offers flexible repayment options.
  • Minimum documentation is required to apply for this loan.
  • IIFL verifies your loan application and approves the application in a timely manner.
  • Individuals looking to avail the SME Loan from IIFL do not have to submit any collateral to the lender.

*Note: For the EMI and repayment calculation, it is assumed that a loan amount of Rs.5 lakh has been availed for a 3-year term at an interest of 18% p.a.

Internal Charges

  • Late payment charges: 2% per month on the loan amount that is overdue.
  • ECS/PDC/ACH dishonour charges: Rs.500 for each instance
  • ECS/PDC/ACH swapping charges: Rs.500 for each instance
  • Stamp duty: As per the laws of the state

7. Tata Capital Business Loan

Benefits

  • The lender offers business loans with flexible terms. Thus, these loans can be customised to meet the borrower’s exact requirements.
  • The lender gives borrowers the option of customising their monthly EMI payments.
  • No security needs to be provided to avail this loan.
  • Individuals between 25 years and 65 years of age can avail this loan.

*Note: For the EMI and repayment calculation, it is assumed that a loan amount of Rs.5 lakh has been availed for a 2-year term at an interest of 19% p.a.

Internal Charges

  • PDC charges: Rs.850
  • Bounce charges: Rs.450
  • Cancellation charges: 2% of the borrowed loan amount or Rs.5,750, based on whichever is the lower of the two
  • Duplicate NOC: Rs.550
  • Swapping charges: Rs.600
  • Fore-closure charges: 5% of the outstanding loan amount plus GST

8. Karnataka Bank Business Loan

Benefits

  • Karnataka Bank offers two types of business loans – MSME Loan and KBL Mahila Udyog.
  • The MSME Loan from the lender can be availed by small, micro, and medium enterprises. The amount of loan that can be availed and the duration for which the loan can be availed will vary based on the purpose of the loan.
  • The KBL Mahila Udyog is a business loan that is catered towards women entrepreneurs to help them meet credit requirements.
  • The lender charges an affordable interest rate for this loan and offers quick approval.

*Note: For the EMI and repayment calculation, it is assumed that a loan amount of Rs.5 lakh has been availed for a 1-year term at an interest of 12% p.a.

9. Mahindra Finance Unsecured Business Loans for SME

Benefits

  • No collateral needs to be submitted when applying for this loan.
  • The loan application process is quick and hassle-free.
  • Funds can be availed for working capital needs and for business expansion.
  • To apply for this loan, applicants need to be over the age of 21 years.
  • In addition to the Unsecured Business Loans for SME, the lender also offers 7 other business loans such as Project Finance, Equipment Finance, Secured Business Loans, Corporate Loans, Working Capital Loans, Lease Rental Discounting, and Bill Discounting.

*Note: For the EMI and repayment calculation, it is assumed that a loan amount of Rs.5 lakh has been availed for a 1-year term at an interest of 18% p.a.

Internal Charges

  • Part-payment charges: Nil
  • Cash handling charge: Rs.100
  • PDD delay charge: Rs.1,000 for the first months and Rs.100 per day thereafter
  • Repayment swap charge: Rs.1,000
  • Cheque bounce: Rs.500
  • Late payment charge: 3% per month
  • Litigation Charges: Rs.5,000 or the actual charge, based on whichever is higher

10. Federal Bank (Asset Power Scheme – Business Loans for Professionals)

Benefits

  • Doctors, architects, and chartered accountants can apply for this loan.
  • The loan amount can be repaid in easy monthly installments.
  • Loans are approved quickly.
  • The lender offers 7 other business loans. The other business loans that are offered by Federal Bank include the SME Parameterised Loan Scheme, Federal Goldsmiths Loan Scheme, General Credit Card Scheme, Commerical Vehicle Finance, Loan to Mobile/DTH/Other Electronic Recharge Vendors, SME Loan against Property, and Loan against Rent Receivables.

*Note: For the EMI and repayment calculation, it is assumed that a loan amount of Rs.5 lakh has been availed for a 3-year term at an interest of 14% p.a.

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